NR Market Watch

THE COUNTY SCENE

Alcan Closing

Losing Alcan, the high quality family wage jobs and great community partner that the company has been since siting the plant began in the late 1980’s, is a blow to Douglas County and Oregon.

Why did Alcan locate in Douglas County?

Up until the mid 90’s, the Bonneville Power Administration (BPA) produced cheap electric power from its Columbia River system.  It was BPA electricity that powered the aluminum smelters on the Columbia River and provided the Roseburg plant with raw material for the industrial and commercial grade electrical wire and cable that Alcan sold into western USA markets.

In the mid 90’s, BPA faced a series of crises (endangered fish listings, drought) that curtailed the amount of power it could produce.  The power hungry smelters lost out and shut down, and Alcan began sourcing from their smelters in Quebec, Canada.  The cost of transporting raw material across the continent added substantially to Roseburg’s production costs.  Until recently, strong markets during the construction boom helped mitigate production costs.  Now, with the depressed economy, Alcan’s west coast markets have substantially shrunk.

In 2007, Alcan ( http://en.wikipedia.org/wiki/Rio_Tinto_Alcan ,  www.cable.alcan.com ) was acquired by Rio Tinto ( Group http://en.wikipedia.org/wiki/Rio_Tinto_Group ), a multi national mining and metals company headquartered in England and Australia.  Rio Tinto acquired Alcan for their minerals and refining capacity, and is trying to sell off Alcan’s wire and cable manufacturing capacity.  The financial balance sheet for this part of Alcan doesn’t look very good and Rio Tinto is interested in beefing it up to make the division look more attractive to buyers.  Because of the high cost of production in Roseburg, this plant was targeted for closing.  Production will be absorbed by Alcan Cable plants in Missouri, Pennsylvania, Quebec and China.

It is frustrating to realize that all of the factors in Rio Tinto’s decision to close the Roseburg plant are beyond Douglas County’s ability to control.  But, they are startlingly symptomatic of problems in rural Oregon.  Our lives have not been made better by Federal environmental laws that have pinched off our ability to create wealth (read jobs) from natural resources; and our manufacturing jobs migrating to third world countries.

Losing manufacturing wage jobs like Alcan will keep us moving down the path to looking more and more like a third world country right here at home.

Susan always welcomes your questions or comments.  Please contact her by email at morgan@co.douglas.or.us; by mail at Douglas County Courthouse, Room 217, 1036 SE Douglas, Roseburg, 97470; or by phone at 440-4201.

Before demographics and pyschograpics, before broadcast and the web, in fact, before almost all modern media, advertising looked a lot like the old Sears & Roebucks catalogs – straightforward, long-copy, facts.

Albert Lasker was the man who changed all of that, according to this really interesting article from Harvard Business Review.

Not only did Albert start the practice of selling the benefits instead of the product, he helped establish brands like Palmolive, Goodyear and Quaker Oats. He owned a chunk of the Chicago Cubs and he helped to found Sunkist. He became a presidential adviser.

Several years ago I read Paco Underhill’s book, “Why we buy” and thought it was one of the smartest books on retailing every written.

In this article from Ad Age, Paco continues to provide quality insights about changes in who the most important retail customers are (women over 50 years of age) and some of the things they want to spend their money buying.

I’ve referenced Paco and his company Envirosell in other blog posts because I think he is a guy with important things to say. His book, “Why we buy” remains worth a read if you are interested in retailing.

The past few years have given us the most turbulent of auto manufacturing times since the early decades of the industry.

Brands closed, or sold, or both, became nearly daily events. Government funding for some of our largest manufacturers was hotly debated.

In the midst of all this, the number one selling American brand in China, Buick, has captured the title of fastest sales growth in 2010. According to a spokesman in this   Ad Age article, designing a quality product for a younger market has been key – though the younger market is about the same age as the average nightly network news audience, 61, which is three years younger than it was.

The majority of American adults who do not use the Internet are just not terribly interested in using it, according to the latest Pew Study.

The study finds that about 21% of American Adults do not use the Internet and that group finds it not interesting, not relevant to their lives, or their just not comfortable using computers.

The same study found that broadband adoption rates have stalled and that American’s are not interested in government action to improve affordable high speed access.

Tomorrow, for the first time in my life, there will be no telephone anchored to a wall in my house. The old phone – gone. The old number – goes to someone else. The old phone bill – history. The old wiring – as irrelevant as a gas lamp.

It took two years to convince my wife that there was little reason not to just use our cell phones. In fact, there was a good reason just to use our cell phones – calls will go to voice mail less frequently. Plus, you can just turn them off. The savings is a nice bonus – though the amount we spend on cell phones is astonishing when you consider what we once paid for a land line.

We’re finally joining the rapidly growing ranks of families who have cut the cord. According to Business Insider nearly 30% of  households rely only upon cell phones. The article includes a chart of the transformation which is of particular concern to pollsters and direct marketers.

“Shoot when the ducks are flying” is an old expression in the advertising business that means advertise when your customers are buying. The best time to sell snow shovels is when it’s snowing.

So, what businesses does August and September favor with higher than average sales (all stats from Monthly retail and food service sales, 2007 sales, census) :

• Auto dealers – August, biggest month of the year at 9.3% of annual sales

• Automotive parts, accessories and tire stores – August, higher than average

• Book Stores – August and September, higher than average

• Beer & Wine – August, higher than average

• Clothing Stores – August, higher than average

• Department stores, discount – August, higher than average

• Furniture stores – August, higher than average

• Gasoline stations – August, higher than average

• Home furnishings stores – August is 2nd biggest month of the year

• Restaurants – August is 2nd biggest month of the year

• Shoe stores – August is 2nd biggest month of the year

• Sporting goods stores – August is 2nd biggest month of the year

You may not be considering hiring Jessica Simpson to ballyhoo for your store’s next big sale but you’ll still find this Ad Age article about how to to work with celebrity spokespeople interesting.

Author Jay Silverman says he has worked as a “brands plus celebrity” director for 30 years and he can tell you about some of the pleasures and pitfalls of working with celebrities. You’ll find the comments at the end of the article interesting as well.

The average mom of two or three students will spend $880, or more this year on back-to-school supplies and clothes, according to MediaPost. Though mom’s are focusing on essentials and their budget that still adds up pretty quickly.

Here is the press release from the Marketing to Moms Coalition:

MOMS SPENDING LESS ON BACK TO SCHOOL SHOPPING,
BUT SPENDING MORE TIME HELPING IN CLASS THIS YEAR
Marketing to Mom Coalition Study Reveals Back to School Trends

CHICAGO – July 7, 2010, Moms plan to cut back on their school shopping this Fall, especially when it comes to clothing for kids, according to a new survey of 1,275 moms nationwide by the Marketing to Moms Coalition . Funded by Current Lifestyle Marketing and Weber Shandwick, the survey was conducted in June 2010 and reveals trends among moms of children age 7-17, including both English and Spanish-speaking Hispanic moms.

This year, spending is expected to decrease 10 percent for kids 7-12 and 12 percent for teenagers 13-17 compared to last year. Moms of 7-12 year olds report average spending of $440 for 2010, compared to $487 in 2009. Moms of teenagers 13-17 will spend $479 compared to $548 last year.

Across age brackets, spending on school supplies, electronics like calculators, and school activities will likely remain flat this year, with the biggest cutback coming in clothing. Among moms of 7-12 year olds, half (50%) say they will spend less than $100 on clothing– a 10 percent increase from 2009.

As spending levels decrease, school volunteering is increasing. More than 90 percent of moms with kids aged 7-17 say they will have the same or greater involvement in their child’s school this year.

“Our research shows that families are still cautious about buying and are sticking to essentials for their kids,” said Maria Bailey, CEO of BSM Media and founding member of the Marketing to Moms Coalition. “But they want to be involved and help as much as they can. As school systems face cutbacks, moms are stepping up by giving their time to help their children’s education.”

As has been the trend in recent years, moms plan to do most of their shopping in retail stores versus online. Online shopping for back to school has been trending down among moms for the past four years, according to Marketing to Moms Coalition reports.

So when the school bell rings – are moms happy or sad that summer is over? Happy! More than 80 percent say they will be happy when their kids go back to school this year.

For more information on the 2010 Back to School Report or the Marketing to Moms Coalition, go to marketingtomomscoalition.org.

About the Marketing to Moms Coalition
The Marketing to Moms Coalition is the only industry group dedicated to furthering an understanding of America’s most powerful consumers. A not-for-profit organization, the group’s goal is to share knowledge and insights about moms to help marketers create programs that engage and empower this driving force of the American economy. More information about the coalition can be found at www.marketingtomomscoalition.org. The founders of the coalition are Maria Bailey, CEO of BSM Media; Bridget Brennan, CEO of Female Factor; Michal Clements, Managing Partner, Insight to Action; Amy Colton, Executive Vice President, Current Lifestyle Marketing; and Teri Lucie Thompson, Chief Marketing Officer, Purdue University.

About the Survey
The survey was comprised of a nationally representative sample of American Moms contacted in June 2010, via an online invitation. The sample was balanced on region, household size, population density, income and ethnicity. An ending sample of 1, 275 moms with children under 18 living at home completed the online questionnaire. The research firm Insight to Action analyzed results.

Wealthstrategiesjournal.com recognizes than 90% of businesses are family-owned, contributing 64% of the gross domestic product and that only one-third will survive the next generation.

The author contends that the usually addressed issues of management, ownership, and wealth are important but insufficient for the long-term. “To keep pace with the marketplace and sustain viability, the family business must look outward. The process used to maintain market relevance through an external focus is business development.

Family businesses need a systematic process of ongoing business development — investments in learning, comparing and adapting — to grow and thrive in an ever‑changing marketplace.”