More from Dr. Tony Gao

"The following 4 examples seem to align well with the electrical car purchase among some consumers - they are all driven by a cause or strong personal belief," says Tony Gao, Ph.D., a marketing professor and retail expert at Northeastern University’s business school:

(1) buying from locally owned independent stores rather than big box national retailers

(2) buying products made in the USA whenever possible to show patriotism

(3) buying brands other than the most hated one (e.g., Pepsi) when loved brand (Coke) is unavailable

(4) buying anywhere other than from the most hated retailer (such is the case of Wal-Mart for some consumers; and the case of a laid off employee from a retailer refusing to shop in his/her former employer for life).

In all of these cases, there is some consistency between personal values/beliefs and what's represented by the brand (Coke), or product type (electronic cars), firm type (small locally owned firms), or country origin (US products). Strong commitment to the personal beliefs is a must in these purchases and there is also a conviction that somehow, one's own purchase will make a difference. These considerations are psychological in nature in that buying or sometimes not buying the product will make the consumer feel good about him/herself.

New rules aimed at protecting buyers

FROM THE JOURNAL STAR

MIAMI —The Federal Reserve signed off Monday on a long-anticipated plan to end the abusive lending practices that victimized many borrowers in the now-collapsed subprime market.

The rules, however, will only cover new loans, not existing ones, so they will have little effect on the rising tide of mortgage delinquencies and foreclosures across the country. The rules don't begin until Oct. 1, 2009.

Among the key changes, the rules bar lenders from making loans without proof of a borrower's income, and require lenders to ensure risky borrowers have reserved money to pay for taxes and insurance. The plan prevents lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value.

A lender, however, can find a "safe harbor" against customer lawsuits by proving it followed certain steps in verifying if the borrower could indeed repay the loan.

"Consumers don't have to prove the whole 'pattern and practice,' but lenders can say, 'Hey, if we follow these straightforward rules, it makes it harder for consumers to sue us for granting a loan they can't repay,'" said Kurt Eggert, a former member of the Federal Reserve Board's Consumer Advisory Council.

If you would like to read this entire article, please go to: http://www.paradigmshiftpr.com/media/placements/protectingbuyers.htm

Feds order new mortgage rules to end deceptive practices

WASHINGTON — After moving Sunday to quell growing doubts about the stability of housing giants Freddie Mac and Fannie Mae, the Fed on Monday adopted new rules to protect home buyers from shady mortgage-lending practices.

Both actions reflect a more aggressive regulatory zeal at the Federal Reserve Board, which has been criticized for allowing the nation's housing market to overheat and ultimately embrace dangerously unsound practices that helped trigger the ongoing foreclosure, lending and credit crises.

But neither move improved the stock market’s outlook on the banking sector. Shares of Fannie Mae slipped 18 cents to finish at $10.08, while Freddie Mac shares dropped 66 cents to finish at $7.09. Banking stocks in general were also down.

Consumer advocates wanted the practice banned. Instead, the Fed left the issue open for further study and possible action later.

"The Fed should be applauded for at least stepping up to the plate, but if this had happened five years ago, we probably wouldn't have had a sub-prime crisis," said Kurt Eggert, a law professor at Chapman University in Orange, Calif., and a former member of the Federal Reserve Board's Consumer Advisory Council.

If you would like to read the entire article, please visit: http://www.paradigmshiftpr.com/media/placements/fedsordermortgagerule.htm

Why different consumers have so many different shopping preferences

"Aside from variances in their budgetary abilities, consumers differ in what constitute 'need fulfillments' for them. Consumers make purchases to satisfy their needs and the following areas of needs exist: functional, social (relational), psychological (personality, religion, personal beliefs and values, etc.), situational, novel, hedonic, or holistic (to match existing possessions)," says Tony Gao, associate marketing professor at Northeastern University's College of Business Administration. "One thing that might be common among consumers of "special" products and experiences, is the reduced importance of the functional benefits and increased role of psychological and social benefits. Another commonality might be the lack of attention to the price of the product, that is, these consumers may have more discretional income to pursue benefits beyond the utilitarian or functional level."

Critics say Fed mortgage rules coming too late

Regulations only cover new loans and leave out entire prime market

MIAMI - The Federal Reserve signed off Monday on a long-anticipated plan to end the abusive lending practices that victimized many borrowers in the now-collapsed subprime market.

The rules, however, will only cover new loans, not existing ones, so they will have little effect on the rising tide of mortgage delinquencies and foreclosures across the country. The rules don't go into effect until Oct. 1, 2009.

Among the key changes, the rules bar lenders from making loans without proof of a borrower's income, and require lenders to ensure risky borrowers have reserved money to pay for taxes and insurance. The plan prevents lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value.

A lender, however, can find a "safe harbor" against customer lawsuits by proving it followed certain steps in verifying if the borrower could indeed repay the loan.

"Consumers don't have to prove the whole `pattern and practice,' but lenders can say, `Hey, if we follow these straightforward rules, it makes it harder for consumers to sue us for granting a loan they can't repay,'" said Kurt Eggert, a former member of the Federal Reserve Board's Consumer Advisory Council.

If you would like to read this entire article, please visit: http://www.paradigmshiftpr.com/media/placements/criticssaymortgagerules.htm

Airlines hit another rough spot

The AMEX airline index plunges to the lowest point in its 13-year history due to record-high oil prices.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- The already roughed-up airline industry nosedived on Friday as companies and their investors got slammed by high oil prices.

The AMEX Airline Index plunged to the lowest point in its 13-year history, dropping at one point on Friday by more than 7% to 13.7 points. That's 69% below its level in January 1995, when the index ( XAL) - a composite of U.S.-based and overseas carriers - was created.

UAL Corp. ( UAUA, Fortune 500), owner of United Airlines, lead the downturn with a 15% plunge in its stock price, after announcing a charge of $2.6 billion to $2.7 billion, partly from the cost of cutting 2,550 jobs. The stock closed on Friday off its lows at $3.63, down nearly 13%.

Cutting capacity.

Harlan Platt, a finance professor at Northeastern University's College of Business Administration in Boston, said he believes that some carriers won't survive another 18 months if oil prices don't ease. He said airlines should cut capacity by one-third.

"If everybody cut capacity by a third now and got rid of all unprofitable flights, the airlines would dramatically increase their survival time at these oil prices," said Platt.

If you would like to read more of this story, please visit: http://www.paradigmshiftpr.com/media/placements/airlineshitroughspot.htm

Cool travel gadget: transforming audio to DC power

I wanted to make you aware of a very cool gadget called the Inflight Power Recharger. This recharger uses the audio out power meant for headphones delivered to the jack in your aircraft seat as a source voltage to recharge your iPod, Blackberry, Game Boy, or whatever. Simply by plugging the cable into the passenger seat headset jack on an airplane, bus or train, the cable converts the audio output into regulated USB power.

The latest version of the Inflight Power Recharger adds an optional battery boost to increase the power supplied and offer continuous power, enabling one to charge their devices anywhere.

To read an independent assessment of the Inflight Power Recharger, here’s a write-up by AirFax: http://www.airfax.com/airfax/features/viewstory.asp?filepath=dec2006\power.htm