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The Roundup April 30

A hard ending maketh a good beginning.

But the president also criticized a group of investment firms and hedge funds that did not agree to a $2.25 billion cash offer to cancel $6.9 billion in Chrysler’s debt, saying they were holding out “for the prospect of an unjustified taxpayer-funded bailout.” Chrysler’s main task in bankruptcy will be to force that deal on those lenders, which the administration said it had the necessary votes from enough Chrysler debt holders to accomplish. . . .

I stand with Chrysler’s employees and their families and communities. I stand with Chrysler’s management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don’t stand with those who held out when everybody else is making sacrifices.”

(“Chrysler files for bankruptcy,” Detroit Free Press, April 30) So I mangled Heywood a bit, live with it. And since we’re on a quote roll, here’s Galsworthy’s famous quippage in the same vein: “The beginnings and endings of all human undertakings are untidy.” How about both at the same time? And Obama, bless his heart, is forcing the bondholders to eat all this untidy after everyone else at the table has had a whoppping big bite of it. If anyone had any doubts about this President’s mettle, this guy Obama is making the last three Presidents we’ve had look like schoolyard pansies who are always good for some free lunch money. And, on a totally unrelated note, the best reporting about the crisis among American automakers has been coming out of the Detroit Free Press with some of the most knowledgable and balanced business reporting I’ve seen in 20 years. Congrats to Justin, Greg, and Mark on six months of unrelenting excellence.


Check out Procter & Gamble’s ad budget — then start thinking about a bit o’ media advertising for your own venture!

Procter & Gamble Co. cut marketing spending more than $440 million globally last quarter, yet still increased media weight or impressions 5%, executives said today, and the company is eyeing more cost concessions from media as the TV upfront nears. . . .

“The media world has been a good world for buyers,” [CEO A.G. Lafley] said, “and not just in the U.S. … In the near-term [it] could be even a bit more of a buyer’s market. So what we’ve tried to do is take our market-mix modeling and our market ROI analysis and figure out how to spend a little less money and get a lot more delivery.”

(“Marketer Increases Impressions Despite Slashing Spending, Thanks to Falling Rates,” Advertising Age, April 30) Our staff here at Shoestring Venture is currently preparing a long blog on the advertising slump and what it means for small businesses. The Web, we all know, has changed everything. However, traditional media advertising still drives the bulk of marketing success in this country. There is simply now way — or somebody hasn’t invented that way — to sell toothpaste using social media, word-of-mouth, or banner advertising alone. So all the bad news coming out of Detroit and Wall Street (and, of course, Charlotte, NC) means great news for launching a small business integrated advertising plan that can actually include print or TV advertising. Think about it — this window will close in a few months.


And speaking of P&G and opportunities for start-ups and small biz . . .

Shoppers around the globe are cutting down on optional purchases like fine fragrances and turning to cheaper store brands for everyday items like toilet paper, sapping sales for consumer stalwarts like Procter & Gamble, Colgate-Palmolive and Kellogg. . . . Many economists have said consumers may not really resume spending until they see some improvement in the job market.

(“Big brands feel pinch in sales as shoppers scrimp,” Associated Press, April 30) Consumers will never kick the “brand” habit — at least on this side of the apocalypse — but severe recessions do have the potential to permanently change buying habits. Let’s say a family decides to stop buying Tide and purchases instead a lower-end brand or generic in order to cut 25% or more off the price. They do this all year long. Even with the return of good times, why should they go back to Tide (at what is now a 33% premium — do the math) if Brand X or Brand Nothing has done as well or better in the last year? The same with toothpaste, toothbrushes, toilet cleaners, and kitty litter. So, there’s a window open to the fundamentals of consumer behavior — one that, if you proceed wisely, you can ride from bad times to good.

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