Tuesday, January 16, 2018
General Electric is taking a $6.2 billion charge against earnings to cover shortfalls in its long-term care insurance portfolio. It is not the only company that has done that. One insurer after another has had to increase premiums to cover unanticipated costs. As a result, long-term care insurance has a bad reputation for being expensive and unreliable. One wonders why anyone would buy it except that aging can impoverish one with charges for home, medical and other care. It isn't much consolation for GE to know that it has joined the club, especially since the company is doing poorly in its other businesses as well. Maybe at some point, insurers will get their actuarial assumptions right, but that day hasn't arrived yet.
Friday, January 12, 2018
Walmart has delivered some good PR for the new tax law by raising salaries and giving bonuses to its million-plus workers. It almost offsets the announcement that it is closing up to 65 Sam's Club stores that no longer fit its strategic direction. Walmart's decision to reward its employees puts pressure on other US companies that have yet to act under the new law. As of last night, Walmart was the only one of the top 10 employers in the US to boost employee wages. That is good PR for the company. Added to that are more liberal benefits for paternal and maternal leave. The company realizes that getting workers is more difficult in a time of low unemployment, and it is acting in its best interests by being more generous. Kudos to the company.
Thursday, January 11, 2018
On rare occasions, a company has a chance to take a high risk with the prospect of a high reward. This is one. No one yet has found traces of the Malaysian airliner that vanished in March 2014. Theories abound. Ships crisscrossed thousands of square miles of open ocean looking for wreckage. So far, they have come up with nothing. Ocean Infinity, a Houston company, is betting that its eight unmanned submarines can find the elusive pieces of the plane. It can gain up to $70 million if it discovers it and nothing if it doesn't. While the potential payout is enormous, the PR for its technologies would be greater. The story would be, "This is the company that can do the impossible in ocean search." Even if it doesn't uncover the plane, there is little risk of a downside. After all, no one else has done it after lengthy searches. Trying is respectable enough and positive PR for the company and its submersibles. .
Wednesday, January 10, 2018
How does one fight a rumor when information is classified? This is the case that SpaceX is in. There is a belief that its rocket failed with a secret load called Zuma on board. SpaceX has said its rocket did everything it was supposed to do, but it can't answer whether the mission succeeded or whether something else went wrong. This is a predicament for the company, which wants to show a sterling record of good launches. So speculation swirls and SpaceX can say little to combat it. Meanwhile if the launch did fail in some fashion that did not involve the SpaceX rocket, the government needs to go back to the drawing board and build another satellite, an expensive proposition. In cases where there is a necessary lack of transparency, there is no good way to rebut rumors. One has to live with them.
Tuesday, January 09, 2018
How can a mistake like this slip though a marketer's control? It is hard to believe the error was intentional. What this says is that H&M needs a person with an understanding of diversity to review its images before they are made public. Apparently no one thought too much about it -- not the photographer, the stylist or the on-set company representative. It doesn't look as if the model thought much of it either. Yet, comparing African-Americans to monkeys has been a decades-long slur against them. Somebody in the marketing chain should have known that. It's the kind of goof that can give a company a bad name.
Monday, January 08, 2018
Blockchain has become a buzzword in the world of finance and mercantilism. One company even changed its name to include blockchain in a cynical move to boost its stock price. (It worked.) The problem with the technology is that no one really knows what it is. They are caught up in the mania of Bitcoin, which operates under a permission-less form of distributed ledger. Corporations entering the field use a different type of blockchain in which all parties agree to a protocol. The distinction is critical to understanding the theory and practice of the software. Now, there is mania, which doesn't understand algorithms, but is only too ready to invest. As usual, early entrants will get burned when the buzzword is no longer fashionable and the market settles into a few practical technologies. Communicators should be wary of using the buzzword until they understand its complexities. There is no need to add to the hype.
Friday, January 05, 2018
This is proof that President Trump doesn't understand the First Amendment and the publisher of a critical work about him does. Kudos to the publisher for advancing the publishing date. Trump has only guaranteed more sales of the volume with his blast at the author. Trump's threat to sue would be laughed out of court. He is going to live with the book's statements and descriptions whether he likes it or not. I have no way of knowing whether the work is accurate, but that scarcely matters. Trump himself has disdain for facts and in his first year alone, the media have counted more than a thousand misstatements coming from his mouth. There is an irony that he says the book is filled with lies. Whether or not the work is truthful, Trump has already made it a candidate for best seller lists.
Thursday, January 04, 2018
There is nothing so dangerous as crowd action when it comes to investing. If everyone says it is time to get into a financial instrument, be it a mortgage or Bitcoin, it is then one should examine the premise on which the mania is built. Do housing prices always rise? Is Bitcoin guaranteed to appreciate in value? Should one go all-in or diversify to moderate risk? Communications practitioners, especially, are subject to the buzz of new, hot trends. They live in a world of information. They, however, should be the foremost skeptics because they have seen it and fallen into a trap more than once. It is hard to resist the crowd but one should be ready. The masses aren't always right and more often than not, they are dead wrong. When it comes to wealth creation, one should ask questions and be independent.
Wednesday, January 03, 2018
This is the latest panacea gullible citizens have taken up. One wonders how credulous people can be, but then it has always been that way long before medicine men toured towns and villages selling quack remedies. The mystifying part of the craze is that well educated people are engaging in it. It seems their university degrees did not produce critical thinking. They live in a semi-state of paranoia, convinced that nothing society offers is pure enough for their bodies. Thus, they eschew vaccinations, genetically modified foods and other conveniences modern society has developed. As PR practitioners we must acknowledge them, but we shouldn't be held back by their beliefs. Companies like Monsanto, the producer of GM seeds, live with the protests of activists who say the corporations are poisoning the world. It makes no difference that their organisms have been tested thoroughly and found safe. There is a lack of trust that no amount of persuasion will cure.
Tuesday, January 02, 2018
While legal marijuana is earning some respect after decades of prosecution, it is also changing the way the plant is grown and harvested. Small producers are being squeezed out and large ones are consolidating the market. There is a wide variety of products offered for sale, more than a small farm can create. It wasn't supposed to be this way. Pot growing was the ultimate small business. One could with a few plants and grow lights make a living. That is no longer true and small producers are being forced to specialize to survive. While legal weed is gaining a positive reputation, fewer producers are successful. It is the iron law of economics.