Tuesday, December 31, 2013

Product Management


      I have a chapter titled "Product Management" in my book Business Fits.  At first thought product management seems to be a simple job.  All you need to do is provide your customers with the products and services they want, but maybe this is not as simple as it seems.
     I recently was looking for a nice warm woman’s robe for a Christmas gift.  I would think this is a common Christmas gift so it should be easy.  Wrong. There was a specific request that presented a problem.  The robe needed to have a zipper front and not have a belt or tie. 
      Macy’s, Younkers, Kohl’s, Herbergers, Penney’s, and Sears were all checked.  They all had large quantities of warm robes with wrap fronts and ties but none with zippers.  This is terrible product management.  What is wrong with the store buyers?  Were they all fed some kind of Kool-Aid to make them all buy the exact same product. 
     Maybe the store buyers just bought what they liked personally with no market research.   Making decisions based on personal perceptions is one of the greatest mistakes in business.  This was one of the primary reasons I wrote Business Fits.  Entrepreneurs looking to buy or start a business frequently make this mistake.  The good news about the poor product management by large companies is that it provides great opportunity for small businesses that are willing to take a gorilla or flanking marketing approach. 
When I was a Ford-Mercury dealer in the early 70s, Ford introduced the Granada.  Ford made a big deal of the dealer introduction with a national show for dealers in Las Vegas.  When I walked into the convention hall, it was like black-tie night at the annual auto shows.  There was a lot of glitz, glamour and girls.  The featured Granadas were all the fancy Ghia models with a vinyl tops and lots of options.  As we walked around looking at all the cars, my wife pointed to a car stuck in a corner and said, “I like that one”.  The car she was pointing at was a plain four-door sedan.  It was plain, but it almost had the look of a Mercedes. 
When I got back to the dealership, I started doing my market research including checking out what Granadas my competitor dealers were ordering.  They were all ordering the higher priced Ghias featured in the Las Vegas introduction.  I ordered the lower priced base model with a minimum of options.  I was heavy on four-doors, but ordered a few two-doors. Some two-doors with equipped with manual transmissions for the youth market.
When the Granada was introduced to the public, I was the only dealer in my area with a good inventory of the lower priced models that were very desirable to a large segment of the market.  I had competing dealers calling every day wanting to make a dealer trade for a lower priced Granada.  I was pretty protective of my inventory as it gave me a significant advantage for a specific segment of the market. 
Poor market research and the resulting poor product management by larger competitors can give a small business a significant advantage in a specific segment of the market.  Don’t try to be everything to everybody.  Even huge corporations fail when they try to do this.  I did a blog on J.C. Penney and possible irrevocable errors they made when they got away from their core customer.  See Business Fits at: http://businessfits.com

I wish you all a happy, healthy, and prosperous 2014.

Tuesday, December 24, 2013

Christian Charity & Capitalism


       As we approach the Christmas celebration our thoughts go to the birth of Jesus Christ, faith, hope, and charity.  THe Christian religion teaches us to be charitable and help the poor.  Many Christians play a very active role in charity.  These charities are dependant on gifts of time and money.  The monetary gifts are dependant on the great capitalist system we live.  Capitalism affords people the opportunity to provide for their vamilies and support charities of their choice.
      The term “Their Choice” is key.  Proponents of big government like progressives and socialists feel the enlightened political elite are in a better position to determine who should receive charity and who should pay for the charity.  They actually believe that government action to redistribute wealth is beneficial to the country.  I think people should have the right to determine which charities they support. 
        I support Christian’s right to celebrate and practice their religion, and pick which charities they want to support.  This may not be politically correct, but I have a question.  Why is it that if a Christian says or does something that someone disagrees with or finds offensive it is politically incorrect, but if other special interest groups do the exact same thing, it is their civil liberty or free speech?  I don’t understand how we let this happen.  I know Christians are very tolerant of others with different beliefs, but we can’t let this tolerance take away our own rights to celebrate and practice our religion. 
        Merry Christmas to all. 

Wednesday, December 18, 2013

Helath Care OR Medical Insurance


        Do you want affordable health care, OR first dollar billing medical insurance?  Does this sound like a dumb question to you?  Maybe you still think you can have both.  Politicians interchange the terms health care and medical insurance.  The two terms are not interchangeable, and this perpetuates the confusion and delays addressing the real problem.  Some people now predict potential problems with a medical insurance card that is not accepted and no good.  As long as we don't address the couase of the problem, it is hard to get serious about a workable solution.
        In 1965, my university insurance professor, Emmett J. Vaughan, first made me aware of the potential problem with first dollar medical insurance.  Emmett knew his subject and was probably the best teacher I ever encountered.  I reference Emmett in my book, Business Fits.  I considered him a friend and he also was a potential investor in one of my business ventures.  Emmett pointed out that for the premium cost of first dollar medical insurance, a person could buy major (catastrophic) medical insurance, put the difference in premiums in the bank savings account, and the money in the savings account could hire a CPA to handle all your healthcare bills, pay the healthcare providers, and you would still have money left over in the savings account. 
        First dollar medical insurance should actually be referred to as first dollar billing medical insurance because the policy does not pay until a deductible is met, but expense is incurred with first dollar billed for both the insurance company and the health care provider.  Everyone should understand that this expense raises both the cost of health care and medical insurance without providing the consumer with any benefit except a false sense of security and convenience.  It’s just common sense.
        I have been talking and writing about this subject since before the Affordable Care Act.  I feel like a broken record, but slowly and surely more and more people are being made aware of the problem.  Obama Care has done a lot to speed up this awareness.  “If you like your health care plan, you can keep your health care plan, period.”  “If you like your Doctor, you can keep your Doctor, period.”  Many people like myself questioned these two lies at the time.  Obama Care may not have passed without these lies, but its just politics, so who cares?
        Maybe enough people will be affected personally by Obama Care to force our elected officials to start addressing the real problem and start working on a real solution to affordable health care.  I hope this happens before we have a complete government takeover of our health care.     Catastrophic medical insurance and medical savings plans are the most probable solutions.  Lets start talking about this real change.  Cost savings of 40% are 80% are a real possibility.  I understand the negative side of this solution is that it does not increase the size and power of the government.  Personally, I think that is a good thing.

Tuesday, December 10, 2013

Build a Better Mousetrap


     "Build a better mousetrap and the world will beat a path to your door." is one of the myths about business discussed in my book Buisiness Fits: How to find the right business for you!
     This is a common mistake for inventors and people with manufacturing experience.  Historically, the people who invent a product seldom are the ones who make a lot of money from the product. 
      The people who market the product are usually the ones making most of the money.  Without marketing, nobody even knows about the better mousetrap, so how can they buy it.
       This is also a common mistake for people offering a service.  You may offer the best service in the world, but if nobody knows about your service, you have no customers or clients.  Without customers, you have no income. 
      Consulting businesses are a good example.  A consultant may be the best in their field, but if they don’t market their services, they’ll probably fail.  Many consultants feel they must spend a minimum of 50% of their time marketing their service and only 50% of their time providing a billable service.
      A common mistake is stopping marketing activities because business is good.  0ne day they wake up with no clients or business and wonder what happened.  Any business plan must schedule marketing and prospecting as part of the daily activities.  

Wednesday, December 4, 2013


     One Webster dictionary defines perjury as: “in law, the willful telling of a lie while under oath to tell the truth in a matter material to the point of inquiry.”  Under U.S. federal law, perjury is a felony punishable by up to five years in prison.  As a private citizen we never want to commit perjury. 
     As honest and moral individuals, most of us feel obligated to tell the truth.  If we are religious, most religions say telling a lie is a sin.  In my book, Business Fits, there is a chapter on customer service.  I state the number one rule of customer service is, “Never lie to a customer.”
     Considering all this, why do we think politicians telling lies is okay?  I hear people say, “Its just politics.”  Does that mean politics is not important?  Does it mean politics don’t effect out daily lives?  Does it mean it’s okay to lie to people so they don’t have accurate information to decide whom to vote for?  Have we come to the point where lies and big money perpetuating those lies decide elections?  I hope not, but we may need to make some changes.  Change can be good, especially if it does not increase the size of government and the power of the political elite.
     I knew an individual who was one of our elected state legislators.  He was appalled at how legislators could make an argument on the house floor and make statements they knew were not true.  I think all elected government officials, appointed government officials, or anyone running for office should be made to take an oath to tell the truth under the penalty of perjury.  I think these government officials should be held to a higher standard and should forfeit all rights associated to the government position if convicted of any felony including perjury. 
     I am just dreaming, as I am not naive enough to think this type of legislation could be passed and signed into law as many of the political elite would be signing legislation that would end their political careers.  While we’re dreaming, maybe we should make the news media, and advertisers knowingly making false statements be subject to penalty of perjury too.  Wouldn’t it be nice to have elected officials actually working for the good of the country?  It was fun to fantasize for a moment. 
     I guess we will just have to take the personal responsibility to actually find out the facts and try to disseminate these facts to our personal circle of influence.  I have to admit that in my younger years, I was too involved with earning a living to actually investigate what was true politically.  I am ashamed to say I made some bad voting decisions because I was influenced by some of my peers and influence peddlers that were not telling, or did not know the truth. 
     Our political system is not perfect, but it is probably the best in the world.  Our founding fathers felt the media would be the country’s watchdog and help the public make informed voting decisions.  Some of our media does this, and some have become lap dogs promoting the political agendas of the political elite. 
     We all have a personal responsibility to gets the facts and make informed voting decisions.  We must take this responsibility seriously for the sake of future generations.