Watch TV or Go to Jail

[Snotty]

Originally posted by Ming

The first thing they teach is that it's cheaper per unit to make 1000 units vs 100.

Originally posted by Agathon

Your argument falls flat on its face because if we followed your logic it's cheaper to make 10,000 units versus 1000 and so on

So yes, it is cheaper to make 10,000 per unit. Obviously the 10,000 would cost more in total, but you make more profit per unit as the base cost was lower.

[Q Classic]

Your argument falls flat on its face because if we followed your logic it's cheaper to make 10,000 units versus 1000 and so on

well, have you ever wondered why it's cheaper to buy things in bulk? bulk rate? i mean, there's a reason why buying a six-pack of 48oz bottles of ketchup is cheaper at sams club than buying 12 24oz bottles of ketchup at a grocery store...

[:) Smiley]

Economies of scale are very much true. Production costs often increase logarithmically versus quantity (as in 10 zylkas cost twice as much to make as 1 zylka, 100 zylkas cost 3 times as much as 1 zylka, etc)

However, anyone with a little bit of economic knowledge knows that there are economies of scale and also diseconomies of scale.

The larger production gets, the more inflexible the company becomes. More levels of management are needed. Also, supply costs per unit rise after a certain point because of such a high demand for said supplies.

Bulk rate food is slightly different, a lot of the savings are from reduced packaging, shipping, shelving, and inventory costs.

Advertising definitely is a good thing- I run a student magazine at my college and advertising enables us to go to print and not charge people anything (nobody is willing to pay for anything in this day and age). However, the case in point with Channel One is different. We don't force anyone to read our magazine.

Likewise, billboards may be in your face also, though I'm sure people don't get up and do nothing but look at billboards.

[Q Classic]

Likewise, billboards may be in your face also, though I'm sure people don't get up and do nothing but look at billboards.

no, but they chop down beautiful trees to put up those billboards.

[MikeH]

Kids need to be educated but do they need to be educated in schools? Not necessarily.

[MattH]

Life is sounding more and more like "The Merchants War" (Pohl)

[Ming]

Originally posted by Agathon
Give it up Ming, you are a terrible arguer. I've had better from a first year student.

Yawn... any first year marketing student knows more about economics/marketing/advertising than you do

If the best you can do is this, then I fear for you. Every product line is different from each other in some respect. That's not the point at issue.

Oh.... now it's not an issue... Remember your opening statement...

Brand based advertising exists because there really isn't that much difference between quality products, so they have to invent some BS story or image to make you think they are different from all the other shoemakers or carmakers.

you make the absurd claim that that the reason that Brand advertising exists is because there isn't much difference between products and that advertisers need to invent some BS... you seem to be the one inventing BS here... You couldn't be farther from the truth.

I guess I have to explain the basics to you since you don't seem to grasp the more simple elements of advertising...

The most often used strategy in advertising is the USP approach. (unique selling proposition) Since there usually is a difference in quality products, the first rule of advertising is to take advantage of it. So your initial
statement starts off with a BAD ASSUMPTION that is not correct. You then follow your mistake with another silly comment that brand strategies are BS.

What is at issue is why people bother with brands.

One more time so maybe you will even understand it.
People buy brands because of comfort levels. They have tried the product, and they know they can trust it to be what they think it should be. Brand loyality comes from keeping your customers happy. If you have a Brand that people trust... a Brand advertising approach makes a lot of sense... it's not done, as you mistakenly imply, because there is nothing else to say and it's just BS... it's done because it is effective with loyal customers. Many times, a Brand approach is used even if there is a strong USP, because a brands strength in the marketplace is so very powerful.

Of course you point out that they increase sales. I knew that, that wasn't my point. Perhaps you should think before you type since I've said this twice now.

Maybe you should think before you type... again, in your opening statement, you said...

Who pays for advertisements? You do, in the money that is tacked on to the price of something you buy in order to pay Ming and Co.

Your implication here is that the consumer is the one that pays for the advertising... Again, in most cases, that is incorrect. Due to the increase in sales in combination with the economies of scale... advertising can lower the cost of the product for the consumer. In the cases where the cost is passed along, it's a matter of a few pennies... but the retailer is the one that marks it up the most... so maybe you should start ranting about the greedy store owners.

Hence the need to create some artificial difference which has no basis in reality. Nike's brand loyalty has little to do with the quality of its shoes

You forget that Nike does a combination of Brand Advertising and USP advertising with the Brand advertising serving as an umbrella for all their product lines... People are comfortable buying Nike products... this is a combination of the image, and the quality that customers have learned to expect from past purchases.
It is not an "artificial" difference... but a true relationship with their customer.

[quote]
But it doesn't for brands like Nike, where the differences in quality matter little.
[quote]

Again... you simply ignore the actual product differences because it doesn't work for your mistaken arguments.

Teenagers simply do not worry about the quality of labelled clothing that much, they care about how cool or hip it is - and that is largely a matter of brand halo as you call it.

Sure they care about how cool or hip it is... but you incorrectly assume that it is artificial and that it comes from the brand advertising. You can't make something hip simply by putting a brand name on it. In an earlier post... I used the following example. Since you obviously just jumped into this thread without reading it, I will repeat it for you...

Abercrombie and Fitch is a classic example of understanding the market, and designing products to meet an already existing need. They were a dying brand... a brand that used to cater to the old fat cat establishment... They were lossing money and market share. They knew they had to change. Since their clients were literally dieing on them... they decided to take a different approach. They sent their people out to places where teens hung out... did research... and determinded the types of clothes that teens thought was trendy and hip... and then started selling clothes that matched what they were being told. An instant success story. They didn't "create" the trend... they worked with an exisiting trend... and ran with it.

A&F Brand would mean nothing to the kids without their ability to deliver a product that is considered cool. And it's a high quality product as well. Kids aren't as stupid as you seem to think... if the product isn't good, or new products aren't perceived as cool... the Brand will then become meaningless and kids will stop buying it. So the products support the Brand Image... it's not just BS as you like to put it.

It sounds magical because it is moronic.

Moronic... you even admit that it's cheaper to produce more than less... So it's truth, not moronic.

And poor economics at that. Your argument falls flat on its face because if we followed your logic it's cheaper to make 10,000 units versus 1000 and so on (lets say these are shoes). But this ignores the point that a market is simply a device to allocate scarce resources. But we don't want just to have shoes - we need to allocate resources to other things, and if people buy more shoes than they really need, we end up wasting resources when we didn't have to. The fact that Nike has to resort to this ridiculous charade shows that shoe consumption is way too high - it's artificially inflated by taking advantage of complete idiots.

More smoke from you to cover up for your original comment that the consumer always pays for advertising.
They don't... and this is an entirely a different discussion than we were having. If you want to talk about whether shoe production is bad compared to producing other things... that's a whole different point and not relevent to what we are arguing. And your comments about it being poor economics is incorrect. It makes perfect sense and is good economics to produce more for less per unit.

In any case that's slightly away from the main point which is that Channel One means that people spend more money over time for a poorer service.

Again.. you don't understand the concept of Channel One. NOBODY PAYS FOR CHANNEL ONE EXCEPT THE ADVERTISERS... so what are you talking about.

The reason you have Channel One in the States is that you guys are highly tax averse and prefer market solutions.

True... but irrelivent to the discussion... and just political ranting on your part, just like many of the comments you followed it up with. Our country is different... so what. Our discussion was about Advertising... not your political points of view on an open market system. Again, go back to your first post...

Which shows you don't understand. The reason that some things are publicly funded is an economic reason - to avoid free riding and its associated inefficiencies. In brief: markets often fail to provide an adequate level of a certain good if left to themselves - that is one reason why we have taxation.

You don't understand... your country is different, we don't want higher taxation... so again, political propaganda that is irrelevent.

Your method seems to be to post material which misses the point at issue and then rant on about I don't know anything. Well, from what I've read, you should quit. I;m not an economist, but you can't see through third-rate market fundamentalist propaganda.

HAHAHAHAHAHAHAHAHAHAHAHAHAAHAHA... You are right that you aren't an economist, as every post you make proves... You are the one that should quit. You keep changing the issues to your political agenda instead of sticking with the real discussion... but totally understandable considering your lack of success so far in discussing brand advertising and advertising in general. I keep sticking to the point... and you are the one that's not.

[:) Smiley]

[Agathon]

Originally posted by Ming

Yawn... any first year marketing student knows more about economics/marketing/advertising than you do

But apparently you don't.

Oh.... now it's not an issue... Remember your opening statement...

Oh Jesus, just read what I've been saying or go hide your head in the sand.

you make the absurd claim that that the reason that Brand advertising exists is because there isn't much difference between products and that advertisers need to invent some BS... you seem to be the one inventing BS here... You couldn't be farther from the truth.

That is precisely the reason why brand advertising in the manner of Nike exists.

The most often used strategy in advertising is the USP approach. (unique selling proposition) Since there usually is a difference in quality products, the first rule of advertising is to take advantage of it. So your initial
statement starts off with a BAD ASSUMPTION that is not correct. You then follow your mistake with another silly comment that brand strategies are BS.

Yawn. Read what I wrote properly before you waste my time with your ignorance.

One more time so maybe you will even understand it.
People buy brands because of comfort levels. They have tried the product, and they know they can trust it to be what they think it should be.

That is one reason people buy brands. Again I will repeat myself. People do not buy Nike for this reason, people buy it because they think it is cool.

What you say holds true for things like clothes powder and suchlike - but then it is just a case of getting people to remember the name of your product so they keep buying it. It is not the same as pretending that say, clothes powder is the essence of sport, or sex appeal or whatever other nonsense you information polluters put forth.

Brand loyality comes from keeping your customers happy. If you have a Brand that people trust... a Brand advertising approach makes a lot of sense... it's not done, as you mistakenly imply, because there is nothing else to say and it's just BS... it's done because it is effective with loyal customers. Many times, a Brand approach is used even if there is a strong USP, because a brands strength in the marketplace is so very powerful.

But Nike claiming that it is the essence of sport or Apple claiming that it embodies a revolutionary spirit is just bull****. Attractively packaged bull****, but bull**** nonetheless.

It seems you don't understand your own field. This is laughable. "Cool" brands just don't advertise the quality of their goods - they promote a sense of coolness. People trust the coolness, not the quality - so to say that it is about quality is misleading (since quality levels between Nike and Reebok are about the same). In fact it's about BS.

Your implication here is that the consumer is the one that pays for the advertising... Again, in most cases, that is incorrect. Due to the increase in sales in combination with the economies of scale... advertising can lower the cost of the product for the consumer.

Oh lord, you really aren't very bright are you. If you had bothered reading what I said you would have noticed that I don't deny that economies of scale occur, what I deny is that this necessarily entails an efficiency gain.

You don't seem to have picked this up, so I'll explain it again. The fact that sales of shoes increase because of advertising may indeed lower the price of shoes from what it would have been with no advertising. That is not certain - people treat economies of scale as an a priori rule when it is much more complex.

On the other hand this does not necessarily entail an efficiency gain since it is completely distinct from the optimal shoe distribution in such a society. If the shoe manufacturers sell way more shoes than people need, that is well and good for them, but not necessarily for the rest of us, since that money would have been better spent on other things.

If people fall for advertisers" BS then they are in a similar position to someone who misreads the instructions on his appliance and buys three times the number of batteries he needs.

In the cases where the cost is passed along, it's a matter of a few pennies... but the retailer is the one that marks it up the most... so maybe you should start ranting about the greedy store owners.

Of course you conveniently ignore the fact that I am subjected to thousands of advertisements every day, which I don't like and consider a form of pollution. That is a cost to me.

You guys are so pathetically inefficient that 99.9% of adverts I see I will never act upon. I almost never see an advert for something I want to buy, and yet my senses are assaulted all the time by your trash.

It's as if someone used a cluster bomb to kill a deer. Completely inefficient and a waste of time. It is information pollution.

You forget that Nike does a combination of Brand Advertising and USP advertising with the Brand advertising serving as an umbrella for all their product lines... People are comfortable buying Nike products... this is a combination of the image, and the quality that customers have learned to expect from past purchases.
It is not an "artificial" difference... but a true relationship with their customer.

I don't forget this at all. But it's a fact that there is little quality difference between Nike's products and those of their competitors.

Abercrombie and Fitch is a classic example of understanding the market, and designing products to meet an already existing need. They were a dying brand... a brand that used to cater to the old fat cat establishment... They were lossing money and market share. They knew they had to change. Since their clients were literally dieing on them... they decided to take a different approach. They sent their people out to places where teens hung out... did research... and determinded the types of clothes that teens thought was trendy and hip... and then started selling clothes that matched what they were being told. An instant success story. They didn't "create" the trend... they worked with an exisiting trend... and ran with it.

Nike does much the same. However the whole thing is an illusion, as is the idea of "cool" in the first place. Part of the logic of "cool" is that you have it when everyone else doesn't. But of course if it is mass produced then enough people get it so as to make it uncool. Then you have to buy something else.

It's a classic case of what economists call a race to the bottom. And people are dumb enough to fall for it over and over again.

So you can say what you like - people would simply be better off if they abandoned the whole "cool" game and all these tossers would be out of business.

More smoke from you to cover up for your original comment that the consumer always pays for advertising.

Of course they do. You are making too much of economies of scale and ignoring other costs. And you are ignoring the fact that if we spend more on shoes, those will become cheaper, but other things will become more expensive. We still end up having to pay the advertisers no matter what. Your so called price decreases are a fiction when applied to the economy as a whole.

[QUOTE]They don't... and this is an entirely a different discussion than we were having. If you want to talk about whether shoe production is bad compared to producing other things... that's a whole different point and not relevent to what we are arguing.{/QUOTE]

Jesus Christ!!! Will you please learn to spell "relevant".

It is perfectly relevant to the discussion since part of the pernicious nature of advertising is that it leads to inefficiencies through overproduction.

Again.. you don't understand the concept of Channel One. NOBODY PAYS FOR CHANNEL ONE EXCEPT THE ADVERTISERS... so what are you talking about.

Yes they do. The kids pay in wasting their time watching it, when they could be doing proper schoolwork. Society pays because the quality of education decreases incrementally.

If people paid for it through increased funding for schools, it would be cheaper. Advertisers don't advertise at schools unless they think they'll get something out of it - they will make more out of the students than the students' parents would spend installing the equipment themselves - that's what makes Channel One a viable business proposition. Unfortunately, the costs are externalized.

True... but irrelivent to the discussion... and just political ranting on your part, just like many of the comments you followed it up with. Our country is different... so what. Our discussion was about Advertising... not your political points of view on an open market system. Again, go back to your first post...

Gee whiz.... how dare a person's politics have any relation to economic theory. Since the problem of advertising is largely a problem of failing markets and externalities, economics is absolutely relevant.

You don't understand... your country is different, we don't want higher taxation... so again, political propaganda that is irrelevent.

You don't - and you pay for it with inefficiencies.

HAHAHAHAHAHAHAHAHAHAHAHAHAAHAHA... You are right that you aren't an economist, as every post you make proves... You are the one that should quit. You keep changing the issues to your political agenda instead of sticking with the real discussion... but totally understandable considering your lack of success so far in discussing brand advertising and advertising in general. I keep sticking to the point... and you are the one that's not.

Since you can't appreciate the connection between politics and economics, you should give up.

What you call sticking to the point, I call failing to understand the underlying issues.

I'm looking forward to your next amusing post.

[Ming]

You added nothing new in your last post... except to repeat bad assumptions and incorrect conclussions that you have tried before. Again... you don't seem to have an even basic understanding of advertising or marketing. But it's really no surprise since you have no formal training... education... or any practical experience in the field. You base your comments soley on opinion and back them up with no real facts or information.

And your continued attempts to move this into the political arena shows your inability to argue the real issues, and the fact that you can't stick to the real discussion.

When you post something new... and something that makes sense... I'll take the time to respond. But everything you posted has already been addressed, and your reply doesn't really dispute anything I've already said.

So feel free to continue your meaningless and incorrect comments and rants... they are amusing... Please continue to highlight how little you really know on this subject.

[MikeH]

Hey Ming. I found a lot of that stuff pretty interesting. I actually learnt something.

[Ming]

Thanks... I have spent over 25 years in the business... have a degree in it... and lecture on the subject. I'm glad to pass some of it on....

[Agathon]

Originally posted by Ming
You added nothing new in your last post... except to repeat bad assumptions and incorrect conclussions that you have tried before. Again... you don't seem to have an even basic understanding of advertising or marketing. But it's really no surprise since you have no formal training... education... or any practical experience in the field. You base your comments soley on opinion and back them up with no real facts or information.

Rot - if you really had anything, you would have provided a formal refutation. But you didn't - which leads me to the obvious conclusion - that you can't.

And your continued attempts to move this into the political arena shows your inability to argue the real issues, and the fact that you can't stick to the real discussion.

Economic theory is one reason people hold political views. To attempt to separate the two is insane. In fact anyone who separates their politics and economics needs to think again, in my view.

When you post something new... and something that makes sense... I'll take the time to respond. But everything you posted has already been addressed, and your reply doesn't really dispute anything I've already said.

Nice way to chicken out.

So feel free to continue your meaningless and incorrect comments and rants... they are amusing... Please continue to highlight how little you really know on this subject.

Even if that were true, you have done nothing substantial to provide a defence of your side - other than dogmatic assertions of your expertise.

Until the next time...

[Ming]

At least I have the expertise

Nothing new from you so... so have a nice day.

[Agathon]

Originally posted by Ming
At least I have the expertise

Not on this matter it seems.

Nothing new from you so... so have a nice day.

Why should I bother when you ignored the old.