Filed under: Marketing and advertising, Best Buy (BBY)

When Toshiba announced over a month ago that it would cease making and marketing HD DVD players, all the retailers that sold those types of players and associated movies in the HD DVD format had pretty much already announced that they’d started scaling down HD DVD inventory. To early adopter consumers who had already purchased expensive HD DVD players, this was the price of admission: not knowing whether that format or the competing Blu-ray format would win.

HD DVD eventually bit the dust, and for consumers who purchased HD DVD equipment at Best Buy, Inc. (NYSE: BBY), the taste was probably quite sour. As in, “what do I do with this $300 player now?” Following competitor Circuit City Stores, Inc. (NYSE: CC), Best Buy is now helping consumers with the frustration. Instead of giving customers a complete credit for the purchase of an HD DVD player like Circuit City is doing (if purchased in the last 90 days), Best Buy is doing something less interesting but with more oomph — as in, free $50 gift cards.

This will cost Best Buy an estimated $10 million, and by many accounts it’s worth every penny. The move has been classified as “brilliant” from just about every corner I can find. The reason? It will bring foot traffic into stores (that’s half the battle of retail) while building loyalty to those consumers that HD DVD left in the cold. In other words “Best Buy cares,” in a manner of speaking. And, no action is required; the cards will be mailed out proactively to those customers Best Buy has identified as having purchased an HD DVD player. Talk about a major marketing campaign here. And, from my perspective, this is actually better than just giving a full refund to customers who ask (ala, Circuit City). Again, it seems that Best Buy has an innovative angle here that should continue making it the first destination for consumer electronics purchases among the electronics early adopter crowd.

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Filed under: Marketing and advertising, Best Buy (BBY)

When Toshiba announced over a month ago that it would cease making and marketing HD DVD players, all the retailers that sold those types of players and associated movies in the HD DVD format had pretty much already announced that they’d started scaling down HD DVD inventory. To early adopter consumers who had already purchased expensive HD DVD players, this was the price of admission: not knowing whether that format or the competing Blu-ray format would win.

HD DVD eventually bit the dust, and for consumers who purchased HD DVD equipment at Best Buy, Inc. (NYSE: BBY), the taste was probably quite sour. As in, “what do I do with this $300 player now?” Following competitor Circuit City Stores, Inc. (NYSE: CC), Best Buy is now helping consumers with the frustration. Instead of giving customers a complete credit for the purchase of an HD DVD player like Circuit City is doing (if purchased in the last 90 days), Best Buy is doing something less interesting but with more oomph — as in, free $50 gift cards.

This will cost Best Buy an estimated $10 million, and by many accounts it’s worth every penny. The move has been classified as “brilliant” from just about every corner I can find. The reason? It will bring foot traffic into stores (that’s half the battle of retail) while building loyalty to those consumers that HD DVD left in the cold. In other words “Best Buy cares,” in a manner of speaking. And, no action is required; the cards will be mailed out proactively to those customers Best Buy has identified as having purchased an HD DVD player. Talk about a major marketing campaign here. And, from my perspective, this is actually better than just giving a full refund to customers who ask (ala, Circuit City). Again, it seems that Best Buy has an innovative angle here that should continue making it the first destination for consumer electronics purchases among the electronics early adopter crowd.

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Filed under: Products and services, Starbucks (SBUX)

When Starbucks Corp. (NASDAQ: SBUX) brought back founder Howard Schultz to revitalize the company’s image, product line and customer experience, the coffee chain’s edge had disappeared. It had lost customers, revenue, the niche and most important — the overall experience — to newer competitors. That was not to say Starbucks still was not king, but it become diluted in the race for newer growth.

Well, to heck with that. Schultz slowed down growth after re-emerging as the company’s CEO early this year, deleted breakfast sandwiches from the menu, retrained the company’s baristas and ensured that fresh-ground coffee smells were the number one priority for every customer coming in the door to experience. But Schultz isn’t stopping there. He also wants customers to push back to the company using MyStarbucksIdea.com. In other words, the coffeehouse’s own social networking site. Schultz wants to empower his customers to help shape the future direction of the coffeehouse he founded.

This is more than a blog or a forum — customers can discuss ideas, argue about them, post new ideas, vote on ideas and form more opinions on improving the Starbucks experience. Well, I though this was exactly what Schultz was busy doing these days? Is he really interested in what every Tom, Dick and Harry thinks?

Will customers really give him all this feedback? I’m skeptical. I agree that balancing the customer’s needs and the business’s needs is critical — one can’t overpower the other. Still, will this even have an effect on Starbucks at all? If it really is this interested, it needs to market the MyStarbucksIdea website just as much as its mocha lattes. Give every customer notice that they can have a voice in this.

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Filed under: Products and services, Starbucks (SBUX)

When Starbucks Corp. (NASDAQ: SBUX) brought back founder Howard Schultz to revitalize the company’s image, product line and customer experience, the coffee chain’s edge had disappeared. It had lost customers, revenue, the niche and most important — the overall experience — to newer competitors. That was not to say Starbucks still was not king, but it become diluted in the race for newer growth.

Well, to heck with that. Schultz slowed down growth after re-emerging as the company’s CEO early this year, deleted breakfast sandwiches from the menu, retrained the company’s baristas and ensured that fresh-ground coffee smells were the number one priority for every customer coming in the door to experience. But Schultz isn’t stopping there. He also wants customers to push back to the company using MyStarbucksIdea.com. In other words, the coffeehouse’s own social networking site. Schultz wants to empower his customers to help shape the future direction of the coffeehouse he founded.

This is more than a blog or a forum — customers can discuss ideas, argue about them, post new ideas, vote on ideas and form more opinions on improving the Starbucks experience. Well, I though this was exactly what Schultz was busy doing these days? Is he really interested in what every Tom, Dick and Harry thinks?

Will customers really give him all this feedback? I’m skeptical. I agree that balancing the customer’s needs and the business’s needs is critical — one can’t overpower the other. Still, will this even have an effect on Starbucks at all? If it really is this interested, it needs to market the MyStarbucksIdea website just as much as its mocha lattes. Give every customer notice that they can have a voice in this.

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Filed under: Bad news, Management, Bear Stearns Cos (BSC)

Barry Ritholtz has an interesting post about Bear Stearns (NYSE: BSC) over at his excellent macro-commentary blog, The Big Picture. In Who is to Blame for Bear Stearn’s Demise?, Barry notes the growing list of people and institutions that are being blamed for the fall of the great Bear. One group seems to be missing from the list though: Bear Stearns itself.

Those accused of destroying Bear Stearns include the Fed. If only Bernanke had raised interest rates, the housing bubble wouldn’t have popped and the credit markets wouldn’t have seized up and Bear could have avoided the fatal run on its reserves. The clients who made that run, including Jim Simons from Renaissance Technologies, are also having some fingers pointed at them. If only they hadn’t asked for their money back, all would be well. And of course, we can’t forget the short sellers, who profited nicely from the astonishing drop in Bear’s stock price.

For the most part, these rumors and accusations seem to be coming from current and former Bear employees. And so it’s not too surprising that Bear management has not been singled out for blame. But Ritholtz dismisses the finger-pointing, calling the various theories of Bear’s collapse “a steaming pile of organic, enzyme-free donkey fazoo.” After all, no one forced traders at Bear Stearns to play so hard in the mortgage-backed securities game. Ultimately, poor management and excess risk destroyed the fifth largest investment bank in the country, not some conspiracy of malevolent outside forces.

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Filed under: Bad news, Management, Bear Stearns Cos (BSC)

Barry Ritholtz has an interesting post about Bear Stearns (NYSE: BSC) over at his excellent macro-commentary blog, The Big Picture. In Who is to Blame for Bear Stearn’s Demise?, Barry notes the growing list of people and institutions that are being blamed for the fall of the great Bear. One group seems to be missing from the list though: Bear Stearns itself.

Those accused of destroying Bear Stearns include the Fed. If only Bernanke had raised interest rates, the housing bubble wouldn’t have popped and the credit markets wouldn’t have seized up and Bear could have avoided the fatal run on its reserves. The clients who made that run, including Jim Simons from Renaissance Technologies, are also having some fingers pointed at them. If only they hadn’t asked for their money back, all would be well. And of course, we can’t forget the short sellers, who profited nicely from the astonishing drop in Bear’s stock price.

For the most part, these rumors and accusations seem to be coming from current and former Bear employees. And so it’s not too surprising that Bear management has not been singled out for blame. But Ritholtz dismisses the finger-pointing, calling the various theories of Bear’s collapse “a steaming pile of organic, enzyme-free donkey fazoo.” After all, no one forced traders at Bear Stearns to play so hard in the mortgage-backed securities game. Ultimately, poor management and excess risk destroyed the fifth largest investment bank in the country, not some conspiracy of malevolent outside forces.

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Filed under: Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM)

No matter how much Detroit would like to change the math, the total always adds up to 100%.

Over the course of the last week, management from GM (NYSE: GM), Ford (NYSE: F), and Chrysler have tried to convince the industry and investors that this would still be a year when domestic vehicle sales will hit over 15.5 million. JD Power recently revised its forecast down to 14.95 million. High gas prices and a tough economy could make that number worse.

Toyota (NYSE: TM) said yesterday that it may not make its global sales goal for 2008, mostly due to poor performance in the US, Europe, and Japan.

Nissan says its market share in the US will increase in March. According to Reuters, Nissan said “U.S. sales were in line with its March targets and it expects to win a higher market share despite increasing concern about the economy.”

In the math of the car business, that means someone will lose share. If it is one or all of the US car companies, the dream of 2008 being a good year fades closer to black.

At 14.5 million vehicle sales, the US market produces about $40 billion less in car revenue than it did last year when sales were 16.1 million. GM had a 25% share last year, Ford 15% and Chrysler a bit over 12%.

Shrinking pieces of a shrinking pie.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM)

No matter how much Detroit would like to change the math, the total always adds up to 100%.

Over the course of the last week, management from GM (NYSE: GM), Ford (NYSE: F), and Chrysler have tried to convince the industry and investors that this would still be a year when domestic vehicle sales will hit over 15.5 million. JD Power recently revised its forecast down to 14.95 million. High gas prices and a tough economy could make that number worse.

Toyota (NYSE: TM) said yesterday that it may not make its global sales goal for 2008, mostly due to poor performance in the US, Europe, and Japan.

Nissan says its market share in the US will increase in March. According to Reuters, Nissan said “U.S. sales were in line with its March targets and it expects to win a higher market share despite increasing concern about the economy.”

In the math of the car business, that means someone will lose share. If it is one or all of the US car companies, the dream of 2008 being a good year fades closer to black.

At 14.5 million vehicle sales, the US market produces about $40 billion less in car revenue than it did last year when sales were 16.1 million. GM had a 25% share last year, Ford 15% and Chrysler a bit over 12%.

Shrinking pieces of a shrinking pie.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Bad news, Citigroup Inc. (C)

Since coming on board, the CEO of Citigroup (NYSE: C), Vikram Pandit, has been using his cost-cutting knife. For example, he cut about 4,200 jobs in January.

And this week, we are seeing more - that is, 2,000 job cuts. The highest concentration will be in the investment banking and trading departments. In fact, it looks like some senior-level folks will get the axe.

Basically, Citigroup needs to take action to right-size its operations to the current environment (after all, in the prior quarter, the company sustained a $10 billion loss). It certainly looks like we’ll continue to see tough time for buyouts as well as public offerings. And of course, don’t expect much in the mortgage finance category.

Unfortunately, it looks like Citigroup may take further cuts throughout the year (especially if the markets remain in the doldrums). So unless you are a stellar “master of the universe,” you just might get a pink slip.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Bad news, Citigroup Inc. (C)

Since coming on board, the CEO of Citigroup (NYSE: C), Vikram Pandit, has been using his cost-cutting knife. For example, he cut about 4,200 jobs in January.

And this week, we are seeing more - that is, 2,000 job cuts. The highest concentration will be in the investment banking and trading departments. In fact, it looks like some senior-level folks will get the axe.

Basically, Citigroup needs to take action to right-size its operations to the current environment (after all, in the prior quarter, the company sustained a $10 billion loss). It certainly looks like we’ll continue to see tough time for buyouts as well as public offerings. And of course, don’t expect much in the mortgage finance category.

Unfortunately, it looks like Citigroup may take further cuts throughout the year (especially if the markets remain in the doldrums). So unless you are a stellar “master of the universe,” you just might get a pink slip.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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