Audi in Marvel Movies: The Impact of Product Placement

    As we have learned in class, product placement is a great marketing strategy for a company to advertise their product. In movies today, companies will pay thousands of dollars for even a quick glimpse of their product in a film. From music playing in TV shows, to nice cars racing in movies, everything is there for a reason.

    I grew up with Iron Man as my favorite movie and an Audi R8 as my favorite car, and that wasn't a coincidence. After seeing Tony Stark, my favorite superhero as a kid, constantly drive around in that car, it instinctively made me want the same. This is a prime example of product placement at work. Through Audi's contract with Marvel, we see Audi's supercars to SUV's appear in movies. By advertising their cars performance in high action chase scenes, to simply showing off their aesthetics and comfort in others, Audi can directly target buyers and regular people like me.

   This type of product placement is the same we see in movies such as James Bond. Similarly to what we see with Audi, by using the Aston Martin as a main aspect of the movie, the companies popularity will immediately increase. When someone thinks James Bond, they immediately think Aston Martin, and visa versa. In this situation, product placement is not only benefitting the advertiser, but is benefitting the movie company as well.

   This idea of product placement is the same as the example Mr. Stewart gave us about MTV in class or music playing in Starbucks. The music we hear on TV and in the store isn't playing just because it sounds good. In both situations, big music companies are paying large sums of money to play their music in hopes for people to enjoy it, and want to hear more. Just like with Audi and Marvel, everything is there for a reason.

    Overall, Audi's deal with Marvel to advertise their cars through movies is a great marketing strategy, and in some cases one that benefits both parties. Through using the R8 in Iron Man, any fan would recognize Audi as "Iron Man's car." This is ultimately what companies want when it comes to product placement in movies- to be recognized when the movie comes to mind.

Gift Giving Makes No Economic Sense

Gift Giving is an Economic Nightmare. Hear me out.

If we look at giving gifts from the standpoint of even the most basic of economics, we see its fundamental flaw. When you buy something for yourself, you predict how much utility it will bring you. If you measure utility in the amount of dollars you would be willing to pay for a certain item, when you shop for yourself, you can actually save a lot of money. You could find a really nice shirt that you just love for just $10, even though you’d actually be willing to shell out $18 for it if you had to. This means that, of the $18 of value that shirt has to you, you kept $8, meaning you have $26 worth right now, despite only having $18 to begin with.

If we look at utility in that sense, we can see where gift giving falls short. When it is somebody else buying the gift, they have no idea how much utility it will bring you. They may  see a shirt for $10 and think that you’d love it. When you receive it however, you might not like the shirt as much as they thought; it could be worth only $7 to you. This would mean that you two only have $7 from the $10, effectively losing $3. In fact, it is believed that between 10 and 33 percent of the value of gifts is lost during gift giving.

It is possible to cheat the system however. If you really get to know your friends and how much joy something brings them, you could get much better at predicting how much they are willing to pay for something. You might be able to break even on the value most of the time. Perhaps you are again buying your friend a $10 shirt. This time it has their favorite character on it. You know that they would buy that shirt for at least $15, since you’ve seen them try a similar one for that price online before they realized it was sold out. This would increase the amount of value between the two of you from $10 to $15. When they see the shirt, they are happy, they hug and thank you. Seeing them happy brings you joy, or utility as well. You might like seeing them happy so much that the $10 you payed is well worth it. In fact, you would pay $50 for them to be that happy since seeing your friend happy brings you joy as well. Now, in addition to the $15 you have $50 extra dollars.

So, if you ever must give gifts, do it well. You don’t want to waste money.

https://www.vox.com/new-money/2016/12/21/14032662/christmas-gift-giving-wasteful

https://fs.blog/2013/12/the-economic-inefficiency-of-gift-giving-why-you-shouldnt-buy-presents-for-the-holidays/

Social Media Marketing: The New Big Thing?

Social media has virtually changed the world that we live in.

More and more businesses are moving towards marketing through social media because of the ability to reach a vast number of consumers through different platforms such as Twitter, Instagram, or Snapchat. Statistics even show that these businesses have seen a 133% increase in revenue after advertising their product on the mobile market. These companies have also seen success when they have influencers, or people on social media with a large number of followers, advertising or spreading the word about the product to their audience.

We saw an example of this in the documentary “Generation Like”, where Tyler Oakley advertised the new Taco Bell Cool Ranch Dorito Taco to his 2 million subscribers. By hiring Tyler Oakley to promote their brand, Taco Bell was able to reach a new audience they may not have been able to if they had just stuck with billboard or even TV ads. More and more companies are now realizing the value in social media marketing and pay large sums of money to celebrities to promote their brand on their respective accounts. Selena Gomez, who has the highest number of Instagram followers at 130 million, can get upwards of $800,000 for posting a single picture for a brand. These outrageous price tags show just how valuable these companies view the social media platforms.

However crazy it may seem, they do in fact have a reason. In fact, a Pew survey in 2016 said that about 71% of teens use at least one kind of social media platform. Being able to access this audience is vital for a company’s success and being able to adapt to this new media strategy can make or break a company’s future.

Does Advertising Even Work?

Most people I know would claim that advertising doesn’t work on them. And it makes sense. When I see an ad for some shampoo, my conscious brain realizes that it is an ad and that’s why the hair in the commercial looks so good. And Geico, is there even anybody who is convinced by a talking gecko? What benefit do companies even get by running repetitive, obvious advertisements?

Well, for one, recognizability. When I mentioned Geico, most of you probably remembered their slogan: “15 minutes can save you 15% or more on car insurance”. Currently, Berkshire Hathaway, the company that owns Geico, is the third largest insurance agency in the US, according to Insurance Business Magazine. Is it a coincidence, or do they have a gecko to thank?

In class, we watched a documentary where we saw Oreo’s pride advertisement. We discussed how it would generate publicity and make people share the ad on their own pages, but,economically, does it do any good? Do more people actually guy oreos because of it?

Some, like Digiday (https://digiday.com/marketing/advertising-even-work-anymore/), don’t think it does. They cite things such as only 35% of people claiming that social media influences their marketing decisions. The problem is, first of all, that 35% is not an insignificant number. But, more importantly, those numbers are self reported, meaning 65% of people believe that social media advertising doesn’t affect them, but that doesn’t mean that it doesn't.

When you try to think how and if does advertising works, the problem is that you are thinking with your conscious brain. Logically, it shouldn't work. And, it doesn’t work. Logically that is. The appeal is emotional. Even when you hear facts and figures, like Geico’s 15% or another companies “30% better than the leading brand”, you aren’t really thinking logically. You don’t research it or question it. You just have the idea that that brand is good and better than other brands implanted in your head.

The truth is, advertising works. Whenever consumers become less susceptible to a certain type of advertising, advertisers just find a new way to market. If advertisements didn’t work, companies wouldn't be making them. No matter how much we think we are better as individuals and aren’t easily tricked by marketing, we will always have that jingle or slogan stuck in the back of our mind.

Supply and Demand of the College Application Process

Every year, thousands, if not hundreds of thousands, of students apply to each college. Each of these schools has a student cap-- a limit to the number of students that they can admit. There are many schools around the country with unbelievably low acceptance rates (such as the Ivy League schools: Harvard, Yale, Princeton, etc.) We often hear the acceptance rates at these schools are ~5 percent. However, I think that in terms of economics, simplifying the ratio of students applied to students accepted causes us to lose important information. So, let's take Harvard, and let's look at their actual ratio of students accepted to students applied. Out of almost 40,000 applicants, just over 2,000 were accepted.

Let's think about these numbers from a supply and demand standpoint, assuming that Harvard can only accept 2,000 students. Clearly, Harvard has a surplus of students applying (hence the low acceptance rate.) For Harvard, this is ideal. The Board of Admissions very well knows that they are not going to accept anywhere near 40,000 students. So, one might ask, why don't they accept more people? Or better yet, why don't they tell fewer people to apply? The answer: Harvard is a business. Each of the 40,000 applicants pays $75 to apply to their school. Individually, this may not seem like a huge amount of money. Any aspiring high school student would easily pay $75 to apply to their dream college (thus, admission fees are inelastic) as they see it is an investment for their future. However, Harvard's net gain from this is $3,000,000. This means that Harvard is paid $2,850,000 from students who they decline.

Oftentimes, high school students complain about the college process being unfair. They will say things like "I just don't get why..." and I believe that there is an explanation for this. Colleges are businesses. Regardless of what they plan on using it for, they want to make money. As students, when traversing the extremely stressful college application process, it is important that we remember that fact.

Price Elasticity of Demand

Recently, we have been discussing the topic of Price Elasticity, specifically the elasticity of demand. Through our in-class project "Spending Analysis," the videos we have been watching, and the weekly reading, we have spent a lot of time analyzing the idea of elasticity. So, what really is price elasticity? Price elasticity of demand can be defined mathematically via the following formula: price elasticity of demand coefficient is equal to the percentage of change in the quantity demanded divided by the percent of change in the price. Broken down, price elasticity is a measure of whether or not a consumer will be willing to continue purchasing, or purchase more/less of a product, depending on variations of the product's price.

Elasticity can depend upon several things, for example, the amount of competition, how essential a product is, customer loyalty, and advertising efficiency. A product is said to be elastic if a small change in price has a large effect on the demand for the product. Intuitively, this makes sense if you think about the word 'elastic.' We would say a rubber band is more 'elastic' if it were more stretchy-- if its structure was more vulnerable to small changes. However, if a rubber band was 'inelastic' then it would not stretch much, no matter how hard you pulled it. The same applies to prices. If you change the price of an elastic product, the demand will vary greatly. However, if you change the price of an inelastic product, the demand will not shift very much.

Looking back at our mathematical formula, a product is said to be elastic if its price elasticity of demand coefficient is greater than 1, it is said to be inelastic if its price elasticity of demand coefficient is less than 1, and it is said to be unitary elastic if its price elasticity of demand coefficient is equal to 1.

YouTube: A Full-Time Career

Recently in class we’ve been learning about how marketing has changed over the past couple of decades, with the latest documentary expanding on the topic of the modern day’s emphasis on views and likes. In the documentary, two YouTubers are interviewed, showing how creating videos and posting them on a video-sharing platform can become a person’s full-time job with the help of sponsorships and brand-deals. This made me wonder, exactly how much money does a YouTuber make, and what can they do to make more money?

    One way YouTubers make money is through the ads that often appear before their video starts and sometimes appear half-way through their video. YouTube charges advertisers approximately 18 cents per view when a viewer watches the entirety of an ad. Because of ad-removing apps and the ability to skip by an advertisement after five seconds, only around 15 percent of viewers actually watch the whole advertisement. YouTube takes 32 percent of the ad revenue, leaving the YouTuber with 68 percent. So how much money is the YouTuber given? Let’s take the YouTube video “Double King” by Felix Colgrave as an example. This video has 14 million views, and because only around 15 percent of those viewers watch the ad in its entirety, there are around 2.1 million paid views. Because each of these paid views is worth 18 cents, a total of $378,000 is charged to the advertiser. Since the YouTuber makes 68% of what the advertiser is paying, Felix Colgrave receives about $257,000 from advertisements on “Double King” alone. As a general rule of thumb, YouTubers receive $18 per a thousand views.

    In addition to advertisements played before videos, YouTubers make money through branded integration, which is when a brand is mentioned or featured in a video. On average, YouTubers charge $10,000 per 100,000 views to promote a product. YouTubers can promote the product in a couple different ways, such as by directly telling the viewer that the video is sponsored by a particular company, featuring a product within their video (such as unboxing videos), or by creating an entire video starring the product.  

    Another common way YouTubers promote products is through affiliate marketing, which means attaching links in the content on in the video description to companies’ websites or places to buy a certain product. Affiliate marketing also includes promotional codes (“use code James for 10% off”).

Sometimes, YouTubers can become brand ambassadors, which is when a YouTuber and a brand agree to become public long-term partners. The YouTuber might be obligated to meet a certain quota of sponsored posts or attend events as a brand representative.

Crowdfunding using Patreon, selling original merchandise, and writing books or starting podcasts are other popular options for YouTubers to promote their channel and make more money.

With so many channels and videos available to watch on YouTube, it has become a highly competitive platform that isn’t always profitable. Although not everyone can earn as much as PewDiePie, who makes a whopping $12 million per year, many people do manage to make YouTube a full-time career thanks to advertisements, sponsorships, and brand-deals.   

Do Consumers Really Know What They Want?

Documentaries “Merchants of Cool” and “Generation like” both mentioned that marketers need to give consumers what they want. Well, then you’d think it would be really simple for marketers to ask consumers in focus groups what they want and then produce that. In some cases, this doesn’t work. As Steve Jobs once pointed out, “It’s really hard to design products by focus groups.  A lot of times, people don’t know what they want until you show it to them.” So, how can marketers give consumers what they want when consumers don’t know in the first place?

One of the key assumptions underlying microeconomics is that the consumer is rational, meaning that the consumer knows what they want and seeks to make the most of the available opportunities given their constraints. However, this is not reality most of the time. A lot of us are influenced by outside factors. When we walk down a supermarket isle and hear a Spanish song, we might think of buying chips and salsa. Or maybe we walked by a really cool looking car and thought, “I need that.” We didn’t know we wanted these things until we saw it or were reminded of it. Try asking a consumer what they want that does not exist yet and you’ll discover that it’s pretty hard for them to imagine a concrete good. But once the good exists, consumers can then decide if they want it. This is a major struggle in innovation.

Other times, consumers might know what they want. For example, Wiley Cerilli used customer development in building SinglePlatform. Multiple other startups also were successful because they used customer development.

This shows that consumers sometimes know what they want. Do you know what you want?

The Psychology of Advertising

What is marketing? Marketing is the promotion and selling of products or services through advertisements. As we saw through “Merchants of Cool,” the aspect of marketing is catching a trend when it’s there and convincing the consumer to buy the product without being too obvious. One way to accomplish this is by tricking the consumer into thinking that they are buying a product because they want it and not because the corporation wants them to get it.

Advertisements promote products by displaying other people, usually a celebrity, with their product. For example, a coke advertisement could display kpop sensation, BTS, drinking coke. When people watch the advertisement, they might feel the urge to drink coke. This phenomenon can be explained by mirror neurons. Mirror neurons are cells in your brain that fire when you both act and watch someone else perform the same act. When you watch someone else drink coke, your neurons are activated and hence you feel the urge to drink coke too. Furthermore, if people are fans of the celebrity presented in the advertisement, they are even more likely to buy the product because they trust their idols - they have that sense of attachment. This is exactly what advertisers want to accomplish; they want people to relate or feel a connection to their ads.

By putting people in certain situations in their advertisements, producers can make the consumer unconsciously want to mimic those people, and therefore also want to use the product they are selling.

A warped youth culture: Corporate identity

When I heard the term “youth culture” in Douglas Rushkoff’s documentary, “The Merchants of Cool”, I instantly thought back to one of my old time favorite songs in seventh grade: “Heaven’s on Fire” by the Radio Dept. It has a sample in it from Thurston Moore who declares, “People see rock-and-roll as youth culture and when youth culture becomes monopolized by big business, what are the youth to do? Do you have any idea? I think we should destroy the bogus capitalist process that is destroying youth culture.”

Seriously, what happened to our dollar votes?! Our consumer sovereignty where our preferences were the determining power?

Ever had that moment when a video starts automatically playing but you have a lot of tabs open and then you have to find the freaking tab where the ad is playing? You know what’s also relatable? Starbucks. Boba. In n Out. Patagonia. College Gear. Fjallraven backpacks. Hydroflasks. Uber. Electric Skateboards. Hoverboards. Teslas. Google Self driving cars. Drones. Fidget spinners. Memes. Desmos. Museum of Ice Cream. Netflix. We mention and endorse brands in our conversations from clothing to tv shows, and if you don’t know what it is, you will feel excluded and alienated. In order to join the conversation, you have to be part of the hype. Brands take advantages of the fact that teenagers constantly seek validation from their peers and hate not fitting in or belonging. Brands stratify themselves within classes as socioeconomic status symbols and serve as indications of “like-minded people”. Brands create communities—online and in person.

I wonder if our satisfaction comes from actually having the product or just looking like everyone else? Even the language we use, we all sound the same and even want to with all the “same’s” or “me’s”. We literally pride ourselves in looking in the same, maybe because it’s a blanket of protection and social security? They’re so tangled and inCORPorated into our lifestyles, and not just in conservations: What if all the things that we think that are “bad smells” is only because we have so many products that have “nice smells” marketed to us? Okay, maybe that’s just my excuse to not brush my teeth or put on deodorant...but it is irrefutable that products have distorted our perception of beauty. And oh also our taste buds. So everything from what we look like to what we smell to what we taste have been normalized by the marketing industry. Oh and also touch: ASMR. @Ikea (https://www.youtube.com/watch?time_continue=54&v=uLFaj3Z_tWw)

Besides the five senses, I was thinking of other marketing strategies that I actually learned from my psychology class: framing and subliminal messages. Framing according to the Myers textbook is “the way an issue is posed” because “how an issue is framed can significantly affect decisions and judgments”. For example, yogurt cups might say 99% fat free instead of 1% fat to make it more enticing. Subliminal messages means “stimuli are below one’s absolute threshold for conscious awareness”. For example, fedex has an arrow in it, baskin robbins says “31” to represent the number of flavors, and and tostitos has two people that act at the “t’s” with a bowl of salsa that acts as the “o” in between them. Logos are the most compact way to send a message. They are the most successful mediums for popularizing a brand because it appeals to our short attention spans. They’re easy for mass distribution and can build a “corporate identity”, which we are literate in:

The cost of hiding the truth is at the expense of consumers and our democracy

I recently watched a documentary called “The Cleaners” about how private companies like Facebook outsource services of content moderation to third parties, where one’s job is to filter social media feeds to keep them clean and friendly by taking off the most disturbing content. Some of these jobs are based in the Philippines where they have to sign nondisclosure agreements, are not paid sufficiently, and are not informed nor equipped with the proper training to do this work—unlike someone in law enforcement who would be. (Despite psychological effects of PTSD, they convince themselves to do it in order to support their families of 8-10 people and because of their devotion to Catholicism, by purging “the sins of the internet”.) These violations of worker rights by Facebook show similarities with strikes from overworked and underpaid Amazon employees.

Modern day boycotting now entails refusing to buy products or support a company that violated human rights. And it’s hard to makes choices to become an ethical consumer these days. Which company caused another environmental disaster again? Which movie am I not supposed to watch because another actor is responsible for sexual misconduct? I can’t keep track...Lately it feels like we’ve been headed in a dystopian direction (maybe the world did end in 2012...or at least it goes downhill from here) where power abuses from authority and ongoing mistrust in our institutions, understandably, continues to grow. But this mistrust is also stemming from another place: the Trump market of media, or shock value which manifests itself in fear and anxiety. It has literally shifted media economics, who mint money through provocative, viral, and “entertaining” material. It’s profitable, but contributes to the tension of political polarization. I mean the more extreme and divisive the content is, the more likely it is to trigger a reaction and blow up in facebook, twitter, instagram news streams. So trolls become rewarded by gaining followers and interaction, further incentivizing them to continue their behavior and producing a positive feedback loop. Companies also become incentivized: more engagement = more $$$.

Frontline’s documentary “The Persuaders” discussed political marketing like merchandising a political party with Frank Luntz. The result of this “artful assembling of facts into lies”—where words are selected to obfuscate the truth and persuade voters—is narrowcasting in place of broadcasting. It reminded me of Astroturfing, which is defined as “the practice of masking the sponsors of a message or organization (e.g., political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participants”. An example would be hiring a crowd and paying the audience to clap for political candidates like Trump did. Both narrowcasting and astroturfing serve as threats to our democracy, where there’s a lack of transparency or corporate accountability.

The full picture is purposefully being hidden from our view. Secretive industries like the dark market for personal data or content moderation are not exposed to the public obviously for a reason: consumers like us would boycott and stop engaging on these platforms. Private companies like Facebook don’t prioritize security against cyber terrorism or the mental health of content moderators because the cost outweighs the benefits. Censoring the truth is much more marketable because companies are not forced to deal with the consequences of their actions. Meanwhile ethical consumers are forced to grapple with the booby traps of narrowcasting in influencing who they will vote, the shock value media that incentivizes trolls, and being fooled by companies involved in astroturfing—which are all hurting our democracy.

Economics of Video Games: Free to Play

As we have been told numerous times in class, nothing is truly free. While it might seem free to us, say a new bike for your birthday or hand-me-down clothes from a friend, it cost somebody some amount of money earlier up the economic road. However, this policy is not exclusive to tangible items. In an ever-advancing age of technology, video games have seen a sharp increase in popularity. From Minecraft to Counter-Strike to Fortnite, the video game era has rapidly expanded, reaching a wide variety of ages and inspiring a virtual epidemic around the world.

Luckily, for the hundreds of millions of people who partake in gaming online, a surprising number of video games are tagged as "Free to Play". But what does this label really mean? Is the game actually 100% free? Obviously making and developing the game costs the company some amount of money, so if the game is free to download and play, how do they make any profit from their product?

We can take the example of Fortnite, the fastest growing and most played video game in the world. Grossing over $1 billion since its release date, it is shocking that it costs any user absolutely nothing to get their hands on this game. Since it is free to download on every single gaming platform (Xbox, PlayStation, PC, etc.), Fortnite has found its way into the homes of millions of kids, teens, and adults. With all of this exposure and popularity comes tons of free advertising. There is that word again: free. Epic Games, which is the developer company of Fortnite, earns its advertisement because of a large number of streamers and gamers who play this game almost every day of their lives. But advertisement alone is not enough to explain the huge profit.

In-game purchases have been a vital source of income for Epic Games. From character skins to dance emoticons to spray paint designs, Fortnite provides numerous ways to customize and personalize your in-game player. Yet, all of these customizations are purely cosmetic, meaning they provide no advantage in the game (other than looking cool, of course!). This way, Fortnite is able to rake in large amounts of money for those willing to spend the cash as well as keep the game fair and equal for those gamers who are less keen on buying cosmetics for a video game. Because of the heavy demand for new and exciting customizations, Epic Games is able to turn this initially free game into a gold mine.

Supreme: Behind the Hype

     If you go to the Supreme website and scroll your cursor over the items, you’ll immediately notice the overwhelming majority of items are sold-out. And when you finally find an item not sold out, you’ll notice the item is grossly overpriced, with T-shirts costing over 40 dollars each and sweatshirts over 400 dollars each (and even bricks at over a hundred dollars each). So why is Supreme so successful if the products the company sells are always sold out and always overpriced?

    The answer is that being sold out and being overpriced is part of Supreme’s genius marketing plan. Unlike other companies, Supreme doesn’t spend much of their budget on widespread advertising, instead preferring to appeal only to their core consumers of young, urban skaters. This exclusivity fosters envy from those outside the Supreme demographic as well as creating a cult-like following for those within the demographic, both of which add to the hype of the brand. Using this “high demand, low supply” business model, Supreme manages to encourage consumers to pay their ridiculous high prices before items are sold out and never produced again. In fact, Supreme products resell at over 1,200 percent of their retail price!

    Supreme isn’t the only company that manages to capitalize on exclusivity. In fact, many companies, including Starbucks, also make their products more desirable by offering limited edition items. Think about all the limited-edition Frappuccinos Starbucks continuously churns out. It’s not that consumers really need another overpriced sugary drink, but the exclusivity of the limited-edition Frappuccino makes it a desirable novelty item.  

    Exclusivity is a fundamental factor that influences consumers’ purchases. It may not be rational to buy a 400 dollar Supreme sweatshirt, but the idea of not being able to buy that sweatshirt after it’s sold out and the thought of owning an item that not everyone can buy can be compelling enough reasons for a consumer to make an irrational choice.

   

Nike and Pepsi: The New age of Advertising

When we think back to the past few years, there are a few advertisements that really stand out. Two that we should examine more closely are the Kendall Jenner Pepsi ad of 2017 and Colin Kaepernick Nike ad of 2018. In case anybody doesn’t remember, the ads played out as follows: Kendall Jenner is doing a photoshoot when a nondescript protest erupts. She decides to join and offers a policeman a pepsi. He accepts, a photographer gets the perfect shot, world peace. The Colin Kaepernick ad features a photo of the football player with the text “Believe in something. Even if it means sacrificing everything.”

Both of these advertisements relied on the same strategy. Coolhunters today have probably figure out the newest thing teens care about: political awareness or, as I’ll refer to it for the sake of brevity, wokeness. While, obviously, not all teens care about or even like wokeness, the fact is, it has become a widespread marketing tactic. From Dove’s “Real Beauty” campaign to Ram’s “Built to Serve” campaign (where they used a MLK speech to sell cars), brands realized that the (liberal) consumer is ready to celebrate a company that acts woke.

If this is all so, why did the two ads mentioned earlier have such different levels of success? The main reason is authenticity. As we learned in “The Merchants of Cool”, kids don’t like it when they are advertised to and will resist it. Companies can’t dictate cool, teens do. Kaepernick really did begin a political movement by kneeling during the political anthem, he really did stand by the ideas that teens think are cool. Jenner, however, was never known as “woke”, so her joining a protest seemed even more disingenuous. Kaepernick's ad also referenced a specific problem and specific political movement while the Pepsi ad was vague and superficial in order to avoid controversy, which ultimately backfired. In general, the Nike ad seemed more honest since it was based n real life and featured a real person (some) teens already looked up to for standing up to social injustice, while Pepsi was overtly exploiting the movement. The Nike ad had authenticity, which is what really makes something cool.

There is a problem, however, with using wokeness in advertisements. It is like selling Che Guevara t-shirts, it goes against all that he stood for. Martin Luther King warned about the deception of advertising in the same speech that was used in the Ram ad. Companies are willing to take over social movements that are focused on people and rights to sell goods, as we can also see in the commercialization of pride. While there is nothing wrong with a company supporting the rights of marginalized people, when they used social movements and wokeness to advertise, that isn’t who they are doing. Brands focus not on helping people, but on making money. While Nike’s ad shows Kapernick, it send the message that it supports his kneeling in protest of police brutality against African Americans, while, in reality, it doesn’t. Nike has a contract for uniforms and apparel with the NFL. The same NFL that now punishes players like Kaepernick for kneeling during the anthem. That and the slew of other human rights abuses by Nike shows that they don’t actually care about the Black Lives Matter movement, they just care about the money it could bring.

It is truly remarkable how good brands have been at appealing to teens by appearing woke. Companies seem to have gotten better at appearing sincere, especially when they aren’t afraid of the backlash that conservatives may have to their “woke” ads. In truth, the only reason they stand by their point is that they can gain more liberal customers than lose conservative ones.

As we learned, however, trends die when advertisers get to them. While political awareness is unlikely to go away, teens will probably eventually realize just how insincere the corporations that act woke are and, when that happens, companies will find another way to appeal to teens.

https://www.nytimes.com/2016/04/24/magazine/earning-the-woke-badge.html

https://www.theguardian.com/us-news/2017/jun/06/progressive-advertising-fake-woke

https://www.cbssports.com/nfl/news/super-bowl-2018-commercials-the-five-best-and-worst-ads-from-sundays-game/

https://www.vox.com/2018/6/25/17476850/pride-month-lgbtq-corporate-explained

https://money.cnn.com/2018/03/27/news/companies/nike-nfl-gear-contract/index.html https://www.thedailybeast.com/nfl-adopts-policy-punishing-teams-for-kneeling-during-anthem

The Steps Subway Took to Become the World’s Largest Fast Food Chain

Subway recently surpassed McDonald’s in terms of their number of global locations and is now the top fast-food franchise in the world. Through a series of smart marketing actions, there were able to get to where they are today. They took off when they latched on to an individual who had been losing weight for a while by eating their food. Eventually, that guy became the ‘Jared’, the spokesperson for subway and a great tangible example of what could happen to you if you ate subway sandwiches as well. Subway also stayed on top of trends and was able to introduce a healthier side to the fast food market. Through advertising a healthier lifestyle, Subway was able to gain entry into places usual fast food spots wouldn’t be, such as in hospitals. The company took advantage of the concept of customer engagement and with this, consumers could regulate the labor that went into the production of the product they wanted. Finally, Subway has been known to treat franchises well and has maintained positive relations with stakeholders. With their strategy of helping franchises feel supported, they soared above similar sandwich shops such as Quiznos and Togo’s.

Why Regressive Taxing?

In class, we learned about regressive and progressive taxing. Both are used in different situations, but would it be better to only use regressive or progressive taxing? Is there a way to solve the unfairness of regressive taxing?

As we learned, progressive tax is taxing different brackets of income, so those that earn more money have a greater percentage of their income taxed than people that have a lower income. Regressive taxing is one set percentage for all incomes, takes a greater percentage of lower income home. Regressive taxing is primarily used in grocery or clothing stores. If two people are both buying an item that costs $100 and tax is 10%, the total cost would be $110. This extra $10 is much more significant for someone that may have only $500 to spend rather than some one who has $1,500. Though this taxing is unfair, it is necessary because there is no way to know someone income when they are just buying food or clothes.

Although not realistic, a possible solution could be to cut or limit regressive or sales taxing, and instead take that money through progressive taxing of total spending based on what and how much they buy. Though this solution, or cutting regressive taxing altogether, would be likely, it would help lower income individuals have not as great a percentage of their income taxed when purchasing items.   

Something I found interesting was from the Consumer Expenditure Reports which said that in 2015, the lowest earning fifth spent $24,470 in 2015. From that income, 15% was spent on food, 35% on home. and 2% on retirement savings. Conversely, the highest earning fifth spent 110,508, where 11% was spent on food, 33% on home and 14% on retirement savings. Even though both groups were buying the same types of items, the lower income fifth was spending a greater percentage of their income on food and shelter than the upper fifth was.

Are there any ways you think we can fix the issue of regressive taxing?

Different Economies Across the World

There are four main types of economies: traditional, command, market, and mixed economies. These different ways of producing and exchanging goods are embodied in different places across the world, and show that the world doesn’t necessarily follow one exact economic plan.

A traditional economy is based off the beliefs and customs of the people, and exchanges through bartering, the trade of goods without using money. This type of economy is usually used in under-developed regions that use antiquated forms of production. Economies like these are present in rural villages in India and South America that haven’t completely industrialized yet. This tends not to be the most effective economic form because of the lack of efficiency and minimal amount of growth available for the country.

A command economy, associated mainly with communism, is where government controls most of the economic decisions. Private property does not exist in these cases and the government controls things like people’s wages and the prices of goods. The most popular examples of this type of economy is North Korea and Cuba, however other countries such as Germany and the former Soviet Union attempted to establish this kind of society yet were not successful. Command economies are not effective as well because in their effort to redistribute and equalize wealth among citizens they take away an essential part of a thriving economy: incentive. With the government controlling how much people are receiving and giving people equal wealth benefits, there are no incentives for people to work harder or be more innovative which leads to a stagnant society.  

Market economies are mainly driven by producers and consumers, who dictate prices based off changes in the demand of the product. They tend to follow laissez-faire policies, meaning the government has little involvement in economic decisions. This popular economic type is typically known as capitalism. The United States is a good example of a market economy, and is considered one of the most efficient forms of government because it allows for growth and gives the people the economic freedom to make choices that best serve their self-interest.

Mixed economies are more popular since it is hard for a society to be purely command or market. Most countries tend to take policies from both, earning the label “mixed”. A mixed economy still gives businesses freedom but allows the government some interference. More specifically, governments typically establish policies to regulate the trade going on between businesses instead of allowing the people to handle it themselves. Many democratic countries like the United Kingdom follow this outline for society.

South African Recession

South Africa’s economy is officially in a recession. A recession is defined as two consecutive quarters of economic decline. South Africa had a 2.2% contraction in the first quarter and a 0.7% contraction in the second quarter. These two contractions mean that there will be less money coming into the country than in the past. This causes companies to make less profit, employ fewer people and raise overall unemployment. The last time South Africa was in a recession was during the global financial crisis in 2009. It is believed that the main reason for the current recession is Jacob Zuma’s, the previous president, corruption. Due to the mismanagement and improper allocation of funds the agriculture, transport, trade, and fishing industries have faced strong declines. For example, a drop in production of field crops has lead to a 37% decline in the first quarter and 29% decline in the second quarter. Furthermore, a decrease in motor vehicle parts and accessories lead to the decline in transport. There are multiple views on how one can get South Africa out of the recession. Duma Gqubule, the founding director at the Center for Economic development and transformation, believes that the government should first implement an emergency cut in interest rates, of 200 rands, to stimulate the economy. Secondly, it must add a fiscal stimulus package. Similarly, Isaah Mhlanga, a macroeconomist for Rand Merchant Bank, argues the government must make South Africa as business friendly as possible so that they can increase the level of investment, improve economic growth, and raise general employment. In an attempt to curb the recession the current South African President, Cyril Ramaphosa has procured an R370 billion (24.7 billion USD) economic stimulus package from China. However generous this may seem, many critics argue that this is a form of "debt colonialism".

To Specialize or Not to Specialize?

In our textbook and through documentaries, we learned about specialization. Specialization occurs when a nation or individual concentrates all their efforts on producing a limited set of goods. It leads to greater economic prosperity and efficiency. If America was great at producing corn and India was great at producing textiles, the two countries should focus all their time on doing what they’re best at (producing corn/textiles) and trade.

Human specialization benefits from the differences in each person’s abilities. For example, some of us may be particularly great at math while others are brilliant with language. Cooperation between the two groups is logical and efficient. One does the math, the other does the English - bam, you have a dream team. On the other hand, some of us are just average at both math and language, which is generally less efficient because we don’t have any special talents to offer to others.

Specialization saves a lot of time and helps workers develop advanced skills. Just think about it, if you were to spend all your time doing calculus, you would probably devise improved techniques and become the best student in the class. Also, you wouldn’t have to shift from calculus to english anymore since you’re ‘specializing’, which ends up saving you time.

We can apply this term to colleges too! Now, often times, colleges say that they are looking for well rounded students, but what they are actually looking for is well rounded students with a “spike” in a certain subject. Well rounded, having As in all classes, just won’t cut it for colleges anymore. Colleges want students who have their classes, extracurriculars, and interests all pointed in a clear direction. Students who set themselves apart by showcasing a clear mindset on what they want to specialize in cut through the noise of thousands of other applicants. Here, specializing is more efficient and more attractive. Colleges are businesses; they are looking for students who can fit into their jigsaw puzzle, for students who can help their peers. They are looking to create that “dream team.”

As the textbook sums it up, “specialization increases the total output society derives from limited resources.” So, with such limited time, go focus on something you enjoy and are good at because it is ultimately most efficient.

How Supply and Demand Drives Bitcoin. Value or no value?

What is Bitcoin? Ever heard of people who had huge economic losses because they bought Bitcoin and lost their password? Bitcoin, put simply, is a form of cryptocurrency. It has three unique qualities: 1) it is limited, 2) incredibly hard to earn, and 3) very easy to verify.

In class, we talked about how economics is the study of how scarce resources are allocated to satisfy unlimited wants. Something has value if it satisfies two conditions: scarcity and utility. Scarcity means that there is a limit to the amount of the good. In this case, Bitcoin is scarce; there are only 21 million bitcoins in this world. By making Bitcoin scarce, it is automatically more desirable to the people. The utility lies in its potential to become a more efficient commodity than we already have (at least, some economists believe that). Bitcoin is independent of government interference, meaning that no single person has control over it. Furthermore, the code that Bitcoin is built on is constantly being modified and improved.

But for others, Bitcoin has no real value. Through the lens of microeconomics, we know that usually when prices of a good go up, demand decreases. This is called the demand curve, which reflects the law of demand - when more people buy more of a product, its price falls. However, for Bitcoin, we see that higher prices actually lead to more demand which generates even higher prices. In other words, the rising prices of Bitcoin is attracting more consumers. This is what we call a “bubble.” Once the bubble pops, the market crashes and the prices for Bitcoin will go down.

So does Bitcoin have value or not?