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Archives for: February 2007

Pester power

Posted on 27/02/07 by Terry O'Sullivan
 

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Money ProgrammeMoney Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

I was struck by the claim that one in five parents in the Money Programme ‘Cost of Kids’ survey admitted to buying new gadgets after pressure from their children, with much of the resulting expenditure ending up on credit cards. The example was consumer electronics companies recruiting our kids to get us to buy gadgets that we don’t need at prices we can’t afford, and only they know how to work. But more worrying is the evidence that pester power, or the ‘nag factor’ as it’s known in America, could be costing us more than money. By encouraging them to ask for the wrong kind of food and drink it’s costing some of our children their health.

From the forum - "the trick to keeping costs down is to think differently and keep things natural"

Marketing first woke up to children in the middle of the 20th century, particularly their power to influence adult purchasing. It began to aim products directly at them rather than having them make do with modified versions of adult products. In many ways this has been a good thing. Taking account of children’s needs in designing products such as holidays, cars or clothing makes a lot of sense. But in other areas, such as fizzy drinks, pre-sweetened cereals and fast food, the effect has been to promote fun and taste well beyond any sense of nutritional value. The vast majority of the food advertising seen by children is for such high fat, salt and sugar (HFSS) foods. Any parent who wants to do the best for their children’s dietary habits has a struggle on their hands as a result.

Advertisers deny deliberately setting parents at odds with their children. Industry codes of practice explicitly forbid such tactics, and pundits argue that pestering has much more to do with age than ads. But there is plenty of evidence from consumer research that parents are uncomfortably aware of ceding to demands stimulated by child-directed advertising. One recent study in Sweden revealed that parents actively avoided supermarket shopping accompanied by their children because of the stress it caused. And a widely-used UK market research report on marketing to children underlines the importance of ‘influenced purchasing’.

Opponents in the pester power debate are not shy of throwing contradictory research findings at each other to support their respective positions. But how good is the evidence, and which way does it point? To answer this question OU Business School and our partners in the Institute of Social Marketing recently reviewed a selection of key research articles evaluating the effect of food promotion on children’s attempts to influence purchasing by adults. We only looked at studies meeting strict quality and relevance criteria. They covered children in different parts of the world (US, UK, Saudi Arabia and India), and used a variety of methodologies. Yet they all concurred that food promotion does indeed stimulate demands from children for HFSS foods, increasing conflict in the supermarket aisles and leading in many cases to exasperated expenditure on less healthy products.

The food advertising industry, pointing to its record of self-regulation in the UK, claims that tightening further the rules on advertising to children is disproportionate. It argues that advertising is only one of a number of factors guiding what children want to eat, and that its effect is negligible compared to, say, the influence of parents, schools or peers. But even if advertising on its own only accounted for 2% of the variation in children’s food choice and consequent obesity (as has been suggested by some researchers), the cumulative effect will leave a significant number with health problems.

Against this kind of controversy, Ofcom, the UK telecommunications regulator, has spent a year consulting on a number of different options to tighten up regulation. On 22nd February 2007 it issued new rules banning HFSS food ads from programming likely to be popular with under 16s by the end of the year. While this looks like good news for any harassed parents out there, it has been greeted with dismay by health campaigners for not going far enough (many wanted a total ban on such ads pre 9pm). Industry bodies are not happy either, criticising the definitional criteria for HFSS foods as inconsistent. Furthermore, Ofcom’s announcement included a commitment to reviewing the effectiveness and scope of the new arrangements in autumn 2008, which seems rather early in the day to be looking for conclusive results. You may be sure that this controversy will not be over till the, er, fat lady sings.

Further reading

 
Terry O'Sullivan

About the author

Terry O'Sullivan is lecturer in marketing at the Open University Business School. He researches and teaches in the fields of fundraising, marketing communications and non-profit marketing.

The BBC and the Open University are not responsible for the content of external websites.

 

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Commuting across the continent

Posted on 22/02/07 by Peter Walton
 

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Money ProgrammeMoney Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

At the Open University I have a colleague whose costs for taking the train from home in Manchester to the office in Milton Keynes are not a lot different from mine, flying from Andalucia. I'm sure Mancunians would understand why I prefer the sun and blue skies of the Mediterranean (not to mention the good red wine at £2 a bottle). The chance to do this is part of the gain that comes from the occasional pain of being part of the European Union, and it is a very attractive proposition, given the right kind of work.

Even so, there are a number of things that you should be aware of when assessing whether it is a practical proposition in your case. The opportunity exists because of cheap air fares and cheap property outside the UK. However, in effect it is there because the market is slow to adjust, and over the medium term house prices will probably rise to reflect the price differential between the costs of commuting internationally and locally.

The same equation includes cheap air fares, and here there is a risk that the airline will reduce its services or put prices up. The cheap British airline operating into my local airport (Granada) dropped from seven flights a week to four last year, meaning that now I have sometimes to drive for two hours to Malaga, or buy more expensive tickets from a regular airline.

The housing is cheap, but getting any work done on a house is a nightmare. If you just want to replace a leaky roof, you need planning permission. The Spanish building culture is such that no job is refused. The builder says they will start at once, they arrive, remove the window you wanted replaced, and if you don’t badger them constantly, it could then be six months or more before they turn up with the new window.

Of course, you have to speak Spanish to be able to handle all that, so a lot of time and effort has to go into that. If you do not speak enough Spanish, you’re forced into the hands of expat builders, who may or may not know much about building, and are quite likely to get you into trouble with the town hall as well.

You need to be clear whether you are going to aim to work in the UK (or elsewhere) or create a business locally at the same time. Around where we live there are lots of expats who have decided to set up a business locally. This is sometimes disastrous, often not only for them but for their clients as well. Often they are realising a dream, but have neither training nor experience for their new work, such as the hairdresser who bought a bar, or the insurance agent running an unlicensed taxi service. Expat businesses are rarely efficient and often illegal. People significantly underestimate the cost of being properly registered to trade in Spain, where the red in the national flag reflects the red tape which is everywhere. Most of these businesses fail or bump along at subsistence level, until the town hall or the tax office catch up with them.

Being a Euro-commuter can be lots of fun, and you can have a great life. But you need to be prepared to work hard to get it set up, and spend a lot on professional advice – only after that can you sit on your sundeck with a glass in your hand. Cheers!

Further reading

  • 24 hour working – discover what’s driving our long hours culture, and how it impacts our health
  • Join the discussion – would you commute from another country?
  • Dream Commuters – The Money Programme investigates the British workers who are moving to other countries, but keeping their jobs in the UK
 
Peter Walton

About the author

Professor Peter Walton is a member of the Accounting & Finance Unit at the Open University Business School. His research interests are in comparative international accounting and financial reporting in an international context.

The BBC and the Open University are not responsible for the content of external websites.

 

PermalinkPermalink Categories: Personal finance, Work

 

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My son, the broadcaster

Posted on 13/02/07 by Elizabeth Daniel
 

Blogging about

Money ProgrammeMoney Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

It would appear from Geoff’s piece last week, detailing his experiences with Microsoft’s Vista, the Open University blogs accompanying this series of the Money Programme, are going to be more personal in nature. This personal theme promises to continue with one of my colleagues sharing his views of living in Spain, whilst working for the OU – and who knows what personal insights we may uncover from another colleague who is set to share his thoughts on the world of male diets and slimming!

Ever keen to follow a trend, I shall share my own experiences of Web 2.0 life. Unfortunately, not being quite on the crest of this wave – I haven’t recorded or posted my own video on-line yet, but like any self-respecting ten year old, my son has. Whilst not in the league of some of the most watched video clips, such as the motivational speaker, Judson Laipply, dancing Barrymore-like to various songs (approx 40 million views) or a personal favourite, the band OK go singing whilst carrying out a complicated dance routine on gym running machines (approx 9 million views). My respect for the latter made greater by the fact I know what damage can be done by falling off such a machine – the belt acts like a sander which is very painful when wearing shorts!

But more interesting to me, than the number of views my son has got (OK – so it’s just a total 45 across two clips), was why he had posted his videos in the first place. After all, he had had no encouragement from me or his school. However, my question to him about why he had posted them was met with a blank look and some words that seemed to be along the lines - you do it because it’s the thing to do. I checked to see if he thought the clips were so good that they would be viewed around the world and he would be famous. No, he hadn’t thought that – it’s just if you have something, you share it. Not a case of everyone might want to see them – more a case of, someone might want to see them.

Still, there may soon be a more obvious reason to share content on the most successful video sharing site, YouTube. At the World Economic Forum in Davos late last month, the CEO Chad Hurley announced their intention to share advertising revenues with those uploading videos. Commentators have speculated that there may be a number of reasons for this move. It may be that they are reacting to competitors that already offer payment to those sharing videos. Alternatively, it may be that Google is looking to earn a speedy return on the $1.65bn it paid for YouTube last November and will drastically increase the amount of advertising on the site. Sharing revenues with content providers may make this increased advertising more acceptable. However, Nicholas Carr, the former editor of Harvard Business Review thinks there may be more significant reasons. He speculates in his own blog, that a relatively small number of videos will account for a disproportionate amount of the earnings. ‘Locking up’ the content of these videos will become important for ensuring significant user numbers and hence revenues. In return for payment, YouTube may seek those uploading videos to grant them an exclusive licence - currently they ask for a non-exclusive, royalty free licence. This would give them complete control over the video hits of the future, just like more traditional media businesses. So, perhaps we should enjoy sharing for the sake of sharing while we still can.

Futher reading

 
Elizabeth Daniel

About the author

Elizabeth Daniel is Professor of Information Management at the Open University Business School where she undertakes research and teaching in the fields of e-business and information systems. Elizabeth also undertakes consultancy work for a number of blue chip and leading public sector organisations.

The BBC and the Open University are not responsible for the content of external websites.

 

PermalinkPermalink Categories: The e-conomy

 

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A Windows Vista experience

Posted on 08/02/07 by Geoffrey Einon
 

Blogging about

Money ProgrammeMoney Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

The first steps on the road to a Vista upgrade were fine – Microsoft’s Vista Upgrade Advisor gave my XP Media Center PC a clean bill of health. And so it should - the hardware that lets me watch and record Freeview TV, listen to music and store thousands of digital photos, while not state-of-the-art, is only 18 months old. Driven by a fast Pentium 4 processor, with lots of memory,  a cavernous hard disk, a 24-bit audio system and a  DVB Freeview tuner from a highly reputable  manufacturer – this hardware should provide good service for a couple of years or so.

My PC’s operating system software – Windows XP Media Center – is another story. The Media Centre component of the OS (Operating System) – the bit that lets me schedule and record Freeview TV and organise my CD collection and digital images - is rather clunky.  Part of the promise of Vista is that it gives an ‘improved media center experience’. Also, the Vista promise of better security is a another real attraction. As a security measure, before I logon to my online banking service or before I use my credit card online, I run the SpyBot and Ad-Aware software to remove unwelcome and unwanted malware from my PC – taking four or five minutes each time. If Vista’s Defender security software can save me time – that’s another reason to upgrade.

After being given this clean bill of health, I was convinced that an upgrade to Vista Home Premium Edition was the right decision. So I placed the installation disk in the PC’s DVD drive and sat back to watch the action.  Microsoft’s claim is that it takes an hour to install Vista. Actually on the first time I was able to do a complete installation, it took 93 minutes. 

On my first attempt, signs of trouble did not take long to appear. Early on, as a prelude to the Vista installation, the host PC’s hardware is checked out – and guess what – this time my DVB TV Tuner was deemed not to be compatible. Later I checked the tuner manufacturer’s web site and found that they had not produced Vista versions of the driver software for this particular model. This failure to provide Vista compatible software drivers is not a Microsoft problem – but they left it a bit late in the day to tell me about it! 

Vista compatible DVB TV tuners are easy to find and replace – so I turned off the PC, removed the offending item and re-started the installation process. This time it ground to a halt when my 24-bit audio card failed.  Actually, the Vista installation process is quite clever, it had found new compatible software drivers for the card – but after they were installed, the card refused to start. So – the PC was shut down again, the audio card removed and the installation procedure started for the third time. This time, with the PC’s original audio system in place, the installation procedure ran to completion. Bliss – even though it had taken almost three hours to get there. 

They say that bliss is an ephemeral emotion – and in this case – ‘they’ are right. After installation, the PC is re-booted to configure its new Vista system. It was here that Vista decided that it now could not get my DVD drive to work. I politely pointed out – actually it was not so polite – that it had been using the bloody thing quite happily for the last three hours – but to no avail!   

A solution? When I regain my courage I will dig out my XP Media Center disks and reinstall the old XP Operating System – a job that will probably mean starting from scratch take a day or so to get up and running again. 

A conclusion? While the upgrade option may look a cost effective solution, it is a fragile process that may prove very costly in both time and money.

A lesson? Don’t believe everything that Microsoft  tells you – particularly their Vista upgrade advisor!

Further reading

 
Geoffrey Einon

About the author

Before retiring, Dr Geoffrey Einon was lecturer in Telematics in the Technology Faculty at the Open University.

The BBC and the Open University are not responsible for the content of external websites.

 

PermalinkPermalink Categories: Personal finance

 

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