Exchange Rates

Do Exchange Rates have an effect on the spending habits of Consumers? While in the Marines for 20 years; I got to travel all over the world and used various forms of Currency, some that had a good rate of return and some that did not. So for me I was able to see first hand on how the Exchange Rate effect the consumer during the buying process.

Lets take a look at Toyota right now; here is a company that for a very long time has been making a lot of money from the Yen Exchange Rates to the U.S. Dollar; right now they are not doing to good, which is mainly attributed to the week dollar and the U.S. Consumer not be able to buy their product.

When the Dollar Exchange Rate is low the U.S. Consumer can not buy that much so foreign consumer goods do not do that well in the U.S.A.. But U.S. consumer goods sell at a high rate in those foreign countries, due to their currency buy more then before. Also countries with a higher exchange rate will invest more into the U.S.; thus allowing for growth and job creation..

So does Exchange Rates have a effect on Consumer spending? I would have to say yes and if you look hard enough you would probably say yes also; so look around and see what is being bought and sold and see where is is made, then look to see what the exchange rate for that country is.

North American Free Trade Agreement (NAFTA)

Do you remember when the NAFTA was first ratified by the United States, Canada and Mexico? I do and I remember all the debates on if it was going to help or hurt the Untied States? In my opion I feel that it has hurt the United States more then it has helped! You ask why? Well think back before NAFTA most of the Manufacturing was still in the United States, now where is it? Canada has a taken some of this; and there are many companies that have moved to Mexico, to take advantage of the Cheap Labor.

Was NAFTA the opening of the Door which allowed U.S. Companies to move their Manufacturing to lower labor cost areas? I feel that it was and all you have to do is look around and noticed what is made in America now days, you will probley noticed its not that much. And why wouldn't the companies move their Factories; remember the job of the Managers of these companies is to make the most money for their Share Holders. So moving your manufacturing to a low labor cost area only makes sense right!

What happens when the United States starts to have issues with not enough jobs to support its populace? Well one thing goods can not be bought! Then where these companies be trying to sell their goods in a country that can't afford it? So now they start selling their goods to other countries; and now they are no longer a American Company.

Well America turn into a 2nd rate country living off of the handout of others? Only time will tell on that subject; but I do know one thing, if our Government does not change its way of thinking and start looking out what is best for America and not the rest of the World. Then we will continue to lose what Companies we have left in American; and we will turn into a true Welfare State, which we are not far off of now. Just look at what has been happening in the news today. The Government is Bailing out Companies; basically put these companies on Welfare. So when does it stop?

Contest and Sweepstakes

Have you ever been hooked on a Contest or Sweepstakes that a Marketer as produced to keep you coming back to what they where producing or providing? Most of have been hooked by the use of this type of Marketing Program; and we will continue to fall for these in the future. Let us look at a couple of these type of Marketing Programs.

What comes to mind when you think Sweepstakes Program? Does Publisher Clearinghouse Sweepstake come to mind? I bet it does it is one of the oldest ones around. So how does this Sweepstakes work? You sign up for magazines prescriptions in order to be entered into the Sweepstakes and hopes of winning big money.

Do you remember the game of Monopoly that you played as a kid? Well one of the biggest McDonald's Contest Games; is themed after the Game of Monopoly. As you buy certain items on their menu; it will have attached one or more of the game style cards on it. If you are lucky enough you can get something free, or even win one of the big prices.

So get out there and play the Contest and Sweepstakes; but remember it is part of a well crafted marketing Plan, designed to turn you into a repeat buyer. But most of the time they are fun and you do receive what you wish; so have a Big mack and read Car and Driver.

Loyalty Marketing Programs

If you ever been stationed at Okinawa Japan during the 1990's; you will remember the Loyalty Cards, that where given out when you got a Haircut at one of the Base Barber Shops. You know the cards that gave you a free haircut, with purchase of ten haircuts. I know I used them due to I got a haircut every week; and had two boys that lived at home, which they needed haircuts also. So for me it was a no Brainer; to save money, I used these cards.

Who else in the marketing world used Loyalty Programs to keep the patrons coming back to them? All the Airlines use Loyalty Programs; which they call Frequent Flyer Miles. What Frequent Flyer Miles does is keep customer coming back to that Airline; so they can gain more Frequent Flyer Miles, so that one day they can use these Miles to pay for a free Flight.

Lets look at another type of Loyalty Program that is used by the Automotive Industry; and that would be the discounts given for repeat brand buyers. I myself like this one due to it saves me money when I buy a new Chevy; which is about the only brad that I buy these days. And trust me any amount that you can get off of the price of a New Car is good news in my Book.

So is Loyalty Marketing Programs effective? Do they get repeat buys from the consumers? In my world they do; and I bet that if you look hard into your world you would see that you too use loyalty programs when making a consumer decision.

Geographic Pricing

OK here is one that all Military Service Personnel have seen; and that is Geographic Pricing. Have you ever been in a Store in one area and gone to the same store in another area; only to find the same like item to be higher or lower in price? Well if you have ever been in the Military and done some traveling you have noticed Geographic Pricing in the AAFES's or Post Exchange on the various Base's through-out the World.

As a Young Marine stationed in North Carolina I would go shopping and buy what i needed and thought I had done good; but then when I would deploy I would go to another base and see the higher prices and know that I really did good. As I made my way through my Career and moved all over the place with my Family; I started to see something going own in the Military Stores that where located in certain areas. If that base was in a High cost of living area then the price's where higher at the Base stores; and if the base was in a Lower cost of living area then the price's where lower. This always puzzled me and could not figure this out; we had to pay more for the items that we bought due to the area (if in a high cost of living area), but our base pay did not go up to match if we lived in the Barracks.

So shouldn't the Base Exchanges base their Pricing on the Demographics of their Customer, instead of Geographic? If their is a higher level of Young Enlisted; instead of Higher Ranking, then this should be reflected in the Exchange Price Sitting.