Monday Oct 11, 2010

The trip to see the movie Wall Street demonstrated another lesson regarding managerial accounting and marketing. Two adults and three children arrived at the ticket window just before I did. Upon hearing the total admission price I heard the man say, 'gee!' The two were so stunned that the fellow selling the tickets suggested they step aside so I could purchase while they made a decision. I observed to the parent that he was of course quite correct. It was 12:20, the parking lot was near empty, the theater was near empty, the kids wanted to see a movie (no not Wall Street) but the price was a big setback. 

That of course is ridiculous. The lesson taught by Southwest Airlines is that the priced needs to fall until the seats are full. When I was in college there was a another airline named Trans Texas Air, derisively referred to a Tree Top. It flew turbo props.  I flew from Austin to Midland one time during all of college, the one way ticket was a whoppping $36, at a time when gasoline was 40 cents a gallon. Trans Texas finally ceased doing business and no doubt most of the seats were empty  that last day. 

I don't know if the kids got to see the movie, I suspect an ice cream cone was substituted instead. 

Inside I thought I might actually get a popcorn, did I want to move from small to medium for another dollar, okay that will be $7. Like the husband outside I was stunned. I declined the popcorn. 

This model won't work. It never does. Whether it is an airline or a movie theater the seats need to be full. During the Depression movies flourished, for a few cents one could forget the Depression and sit inside removed from problems for a couple of hours. Donwloads fill that slot now. I was at Regal Entertainment Group RGC, It peaked earlier this year at 17 and is now 14, moving opposite of the overall stock market which is up, no wonder. Gee a matinee ticket and popcorn is the same price as the stock, what's wrong with this picture?

Wed Oct 6, 2010

shoppers are showing up at 11 PM at many grocery stores, why?  Because their food stamp cards are electronically replensihed at  midnight. The panry is bare by month end. Stores have noticed and are making changes in inventory to take this into account.  Many offer smaller sizes priced under one dollar by month end.

Funny the NBER says the recession is over…

Wed Oct 6 2010

Here isan interesting article on GM. Yes the debt is down but have things really changed between the union and management. For those not up on NLRB and such, most of the GM Ford Chrysler plants are in union shop states. This means one can be required to join the union as a condition of employment. And so all the workers at GM are unionized. The company and union never really got along, the article makes the point that the head of the union was stunned to discover that GM was indeed in bad shape, gee who knew huh?  Point being each side had exaggerated for so long neither believed the other.

The Cruze plant won't open, not good.

I have termed the poor conditions in the North versus the much better in the South as the New Civil War. Indeed, will southern states pay to bail out the failed plans of northern states and cities?  Stay tuned.

Monday Oct 4, 2010

Our last post was about building customer loyalty. This one is about chasing the 'customer' away.

Companies have been fleeing high tax New York and California for some time.  The size of the thundering herd running for the exits is getting larger. In this case many are going to Utah. Click and you will recognize many of the names. You will recall that Arnold was elected and tried to lure some back to the state, it is not happening. As we say in managerial accounting people do not complain, they switch. The size of the facility Adobe is building in Utah suggests this will be a permanent exodus.

San Antonio is the beneficiary of that same California exodus. Here is an article by the ImClone founder.