Meal deal economics

Posted on September 4, 2017 by Tom Bell

The law of demand is one of the most widely understood laws of economics: if you raise the price of something, fewer people will buy it; if conversely, if you reduce its price, more people will buy it.

The law generally holds true as long as the goods in question don’t have any special properties or constraints. However, there are a number of known exceptions, for example:

Veblen goods – expensive goods which are desirable for the status they confer on anyone rich enough to buy them. Contrary to the law of demand, demand for a Veblen good will rise as its price increases.
Giffen goods – a cheap but essential good which counter-intuitively increases in demand as its price rises. This is because, if a staple food (e.g. bread) rises in price, the poorest consumers have to stop buying more expensive foods (e.g. meat), and spend the savings on more of the cheapest good.

I hypothesise the existence of another type of good which behaves as an exception to the law of demand: a meal deal good.

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Heineken takes a strong lead on Most Dishonest Advert of 2016 with ‘Moderate Drinkers Wanted’

Posted on January 25, 2016 by Tom Bell

I haven’t done Worst Adverts of the Year for a while now, but I’m considering resurrecting it for 2016, given Heineken’s early lead in the coveted ‘Most Dishonest Advert’ category.

The ad shows a sequence of women on a night out, singing a montage of Bonnie Tyler’s Holding Out for a Hero, as they contemptuously ignore the drunk men stumbling and snoozing around them. It ends with a female bartender being impressed by a man who leaves the bar after having only one drink, which leads to the tagline, “Moderate Drinkers Wanted”:

The advert is so breathtakingly disingenuous, it takes a few seconds after seeing it to start to process what might be going on here. Obviously, they can’t be telling their customers, “we want you to buy less of our product.” They must know that, as studies prove, the majority of their revenues come from dangerous and harmful levels of binge-drinking.

Do they think that by pretending their beer is only for more discerning (and therefore attractive) moderate-drinking men, they’ll raise its status and men will stupidly drink more of it? No, I don’t think that’s Heineken’s tactic here.

To understand the advert, you have to realise that it’s not aimed at potential Heineken customers at all. It’s primarily aimed at regulators. It’s part of a big lobbying campaign, attempting to prove to governments that the alcohol industry is a responsible self-regulator, that it doesn’t want its customers to over-use its products and is taking steps to stop them.

The campaign, of course, is paid for with the profits Heineken makes as it fuels a public health catastrophe, the costs of which are socialised to the rest of us. And the reason the industry wants self-regulation is so they can avoid minimum unit pricing, and continue to sell 15p/unit cider to its biggest customers: alcoholics drinking themselves to death.

The CXO Clusterbomb

Posted on February 3, 2015 by Tom Bell

Do you find, like I do, that however rigorous you try to be in checking every “do not email me…” option, you still end up receiving corporate spam, marketing emails from every company you’ve done business with? I think they just ignore those boxes, add you to the marketing list anyway, and hope a few of you won’t bother unsubscribing.

What’s even worse is when you find yourself unable to unsubscribe. This often happens, ironically, because you took the most data-cautious route of all, and refused to sign up for an account. They added your address to the mailing list anyway, and now you’ve got no account to log in to, to change your subscription settings.

The solution to this is either to create an account (and they’ve got you after all, the conniving bastards) or contact customer services. But the latter option is often made deliberately difficult. There’s no email address on the website, or if there is it doesn’t work. The final resort is haemorrhaging cash on a telephone call to Bangalore in which you have to navigate a problem resolution flow chart, which you’re not allowed to see, and which is only described to you indirectly via an intermediary, who speaks the same language as you, but not a mutually intelligible dialect of it.

At the end of the phone call, in which you’ve been told to “click the unsubscribe link” and then explained that you’ve already done this 14 times and you’re still receiving emails, you just know that when the operator has told you they’ve unsubscribed you from the list themselves and the problem is now resolved, all they’ve done is click the same link, and you’ll be receiving more spam from them in less than 24 hours.

I’ve developed a new strategy to fight unsubscribable corporate marketing emails, although it could be applied more widely to get resolution on any customer service issue. I call it the CXO Clusterbomb.

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Shreddies: four layers of bullshit

Posted on December 20, 2014 by Tom Bell

So, Shreddies have dropped their cutesy “Knitted by Nanas” marketing campaign (which was actually a sneaky attempt to pretend they were all lovely people, not a giant baby-killing, child-slaving, famine-exacerbating industrial food-processing corporation). Instead, they’re now promoting their small squares of processed wheat with the following ziggurat of bollocks:

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Why Labour is in crisis: the disastrous 1997 election

Posted on November 17, 2014 by Tom Bell

The worst thing to happen to the Labour party in the last 30 years was its landslide victory at the 1997 general election.

Ed Miliband: a vacuum of leadership (Wikimedia Commons)

Labour is currently undergoing an ideological crisis, similar to the one the Conservative party went through between its overwhelming defeat in 1997, and the election of David Cameron as leader at the end of 2005. It has no idea what it stands for or how to persuade people to vote for it. It is haemorrhaging its core working class voters to apathy, UKIP or worse. Its leader, Ed Miliband, is a catastrophe: vilified as a union puppet by right-wing commentators, but simultaneously, completely incapable of speaking for working people or earning their trust and confidence. The fact that Labour sympathisers now wistfully imagine how much better things would have been if David Miliband had won the leadership – even though the criticisms of Ed (out-of-touch, middle-class, London, Oxbridge, career politician / policy wonk with unfortunate ties to the Blair/Brown years) apply equally well to David – shows how poor and uninspiring the potential Labour leadership pool is.

The existential plight Labour now finds itself in is a direct result of its long period of electoral failure in the ’80s, followed by its resurgence under Tony Blair in the ’90s. Continue reading →

Useless product innovations #1

Posted on August 25, 2014 by Tom Bell

And now for a new regular feature of the blog: Useless Product Innovations.

Water filter jugs are a pretty straightforward product. You pour water into the chamber at the top of the jug, it trickles down through the replaceable filter cartridge, and the filtered water sits in the bottom part of the jug, ready to pour. It’s not the most essential item, but it has a clear and simple purpose, and provides some value: if you’re in a hard water area, it does make tap water taste less minging, and reduces limescale in other appliances like kettles and irons.

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The lie at the heart of “loyalty” cards

Posted on September 12, 2013 by Tom Bell

I’ve always been opposed to brand “loyalty” card schemes, like Nectar and Tesco’s Clubcard, and I’ve never signed up for any. We all know that they’re used to track customer shopping behaviour, and I don’t want to be tracked in that way. But it was only recently that I was struck by the fundamental dishonesty involved.

The story promoted by companies running the schemes is something like this: each time you shop with us, we’ll give you a tiny discount, but it’s only redeemable in discreet chunks, and we think this will give you an incentive to continue shopping with us instead of our competitors. In other words: we’ll trade you a non-binding increase in the probability that you’ll choose us for future shopping, which we think is worth two or three pence in every pound, in exchange for rewards equivalent to, say, one pence per pound.

The flaw in this story is that carrying a “loyalty” card doesn’t increase a customer’s chance of using the same shop on any future occasion. As far as I can tell, there are two types of people: those who don’t use any “loyalty” schemes (like me), and those who use every “loyalty” scheme going, and carry around a purse stuffed with cards so that they can get points and discounts wherever they happen to shop.

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Tag Archives: consumerism

Meal deal economics

Heineken takes a strong lead on Most Dishonest Advert of 2016 with ‘Moderate Drinkers Wanted’

The CXO Clusterbomb

Shreddies: four layers of bullshit

Why Labour is in crisis: the disastrous 1997 election

Useless product innovations #1

The lie at the heart of “loyalty” cards