Andalucia Steve

...living the dream

Marketing Memories from the UK to Spain

Fondly remembering the days when marketers used to give stuff away!
 
Kids like me who grew up in the 1960s probably had one advantage over all generations of children before or since in that we were the greatest beneficiaries of the boom-time of incentive marketing. If you were born any earlier the economy wasn't quite so strong and so marketers were being a little more thrifty and if you were born a little later, well the bean counters kind of took over and clamped down on frivolous spending. But for about a decade and a half there was a period of unparalleled abundance where marketing folk were showering us with freebies.
 
My memories might be filtered through rose-tinted spectacles but I seem to remember pulling into a garage with my sister to buy petrol and coming out with armfuls of stuff. I got to choose whether we filled up at Shell or Esso according to which promotions were going on at the time, be it aluminium coins minted with the faces of the players of the world cup squad, to WWF sponsored 3D pictures of wild animals - I got the full set of those! We aquired so many free mugs that dad had to put a new shelf up!
 
These were the days of green shield and co-op stamps. Loyalty was a big deal and made shopping fun. Everywhere you went had giveaways of one sort or another. My dad built me a go-cart and before it was finished I'd covered it with stickers for Castrol and Motorcraft a relative had kindly picked up for me at the Earls Court Motor Show. Mum came back from the Ideal Home exhibition one year with two carrier bags stuffed with giveaways. It was an exciting time to be alive.

Somehow it all came to an end. I can't put my finger on when exactly. It may have been the economic mayhem of the 70's with the oil crisis or later Britain being so strapped it had to borrow cash from the IMF. Maybe it was the rise of Thatcher and a political class who knew the price of everything and the value of nothing. I just remember going into a petrol station one day and seeing a promotion for a model Ferrari. I forget the exact nature of the deal but one had to collect enough coupons to give you the privilege of being able to buy it. The giveaways of my youth had given way to a vulgar catchpenny. I felt a chill in my heart, though I pocketed the coupons in case I changed my mind (I didn't).
 
That seemed to be the end of the line for free stuff. From then on if I saw anything that looked free it generally had strings attached if I looked closely enough. Some Madison Avenue executives had decreed marketing's freebies were now merchandise. Incentive marketing was dead. RIP. Then I moved to Spain. It was like stepping back in time. Suddenly I was in an agricultural community where everyone seemed to be wearing sponsored straw hats and T-shirts. It was heaven, but the best was yet to come.
 
I'd befriended some neighbouring farmers who belonged to the local co-operativa. Co-operatives are common in agricultural areas of Spain as they enable farmers to collaborate and get better deals on their produce. One day they said there was a coach-trip being organised to go to a trade show and they asked me to come along. It was free and a great opportunity to practice my fledgling Spanish so I said yes in a heart-beat.
 
The day came and we boarded the coach. It reminded me of the British Legion charabanc trips to Littlehampton my parents used to take me on when I was a kid, but instead of crates of beer being chugged it was botas of red wine! These are the wineskins that one holds overhead in order to pour the wine into the mouth, an aquired skill which I clearly lacked.  I was the only one stepping off the coach with red wine stains all down my T-shirt, much to the amusement of everyone aboard! We arrived at a big exhibition center in Torre Pacheco which reminded me of Earls Court in London. For about an hour or so we wandered around the exhibits. I mounted cabs of tractors and reverentially inspected chainsaws so as to feign some knowledge or interest in such matters in order to justify my presence to those who may have correctly surmised that I was really only there for a free lunch! 
 
Gradually we meandered to the end of the hall, exiting into what was the largest seated outdoor dining area I had ever seen. It hadn't dawned on me until that moment, but this event must have been the annual outing for all the co-opertivas in the province of Murcia, and there were clearly a lot of them! I counted the tables and worked out the number of covers was about 5000! There were articulated lorries coming and going with all the food, which was being brought to the tables by a small army of waiters and waitresses. At the end of each table was a container of ice-water the size of a plunge pool, full of beer and cans of soda to which one could help oneself. 
 
The President of the Region of Murcia was in attendance, so I can legitimately claim to have dined with a President! The food was top-notch and it kept coming all afternoon. The event was sponsored by a number of national and regional banks, La Caixa, BBVA, Banco Popular etc all of which seemed intent on out-doing the other, both in the number of posters on display and later in freebies given out. I copped for some pens, key-rings, the obligatory straw hat and a jolly smart ice-box courtesy of the CAM bank. As the alcohol flowed, speeches were made, presentations awarded, then there was a huge raffle, which I think was done by seat number. Well it seemed to go on for hours. I've never seen so much stuff given away. From plasma TVs to George Foreman grills there were hundreds and hundreds of giveaways. It was a 1960's incentive-marketer's wet dream!
 
This event took place a few years before the 2008 crash. I seriously doubt in the wake of it that events like that take place anymore. The bank behind my ice box (and my mortgage) the CAM went belly-up and were sold to Sabadell for a euro. Doubtless the bean counters have since stepped in to put a stop to all the fun, but I fondly remember that one sunny day in June that was for me, the Zenith of incentive marketing.
 
 

Why isn't the world worshipping Elon Musk?

Some thoughts the Tesla/Space-X boss.

 

We all know who Elon Musk is, Tesla, Space-X yada yada, yet he seems underrated by the press and positively despised in the comment section of tabloid newspapers. I'd like to address that here by highlighting some of his thought processes. Normally I aim to blog about 1000 words for a nice bite-sized read, however to cover Musk's brain in such limited space will be a zesty challenge so please forgive if I overrun!
 
Musk is seen by some as a nutcase who smokes dope on the Joe Rogan show, makes unfortunate Tweets about the 'pedo guy' and who got into a very public altercation with rap artist Azealia Banks about acid-taking etc. Only last Friday (1st May 2020) he made a seven word tweet that devalued Tesla stock by $14 billion dollars. Yet despite his maverick social media profile he is capable of thoughts of the loftiest brilliance.
 
I can't for the life of me remember where I originally read it (and I've been unable to find a source - doing a weekly blog doesn't allow as much time to research as I'd like), but the thing I first heard about Elon Musk that really impressed me was the simple idea he had to validate the ownership of bank accounts for use with PayPal. I was a web developer back in the 1990s involved in building e-commerce websites. We used to do them from scratch in those days before generic e-commerce platforms had matured, so I was familiar with the problems involved in taking and making payments online. Systems soon evolved to take payments by credit cards since the card companies had a more modern infrastructure, expiry dates, CV codes etc. Banks however, with their systems rooted in the dark ages had no way to validate the ownership of an account online. Say a client sent you an email with his bank account and you needed to send him some money for the exchange of goods, how did you know the bank account was actually his and not that of some hacker? 
 
Elon came up with the simple yet brilliant idea of paying two micro-payments to the account, say $0.34 and $0.83. The client had to read these numbers from his bank statement and enter them in the PayPal website. Musk had therefore generated the equivalent of a PIN number to verify the account. At first I thought how dumb, to give money away to verify a bank account, but as I thought more about it I realised it was genius. The two numbers would never cost PayPal more than $1.98, an expense which would easily be offset by the reduction in fraud and that would enable PayPal to transact directly with bank accounts, which had much cheaper transaction costs than anything else. You could for example send cash via say Western Union, but then the Western Union agent, usually the post office, would need to be paid to validate the identity of the payee by physically checking the passport which is a costly process in comparison. So from then on, I hailed Musk as a genius capable of conceiving ideas the like of which I could not. 
 
PayPal was not even Musk's first multi-million dollar venture. He'd already founded an online city guide, Zip-2 with his brother Kimbal in 1995 which was sold in 1999 with Musk getting $22million for his 7% share. Prior to that, while in college, Musk has spoken about his musings on the essential matters which would most affect the future of humanity and came up with five things. These were:
 
The Internet
Sustainable energy (both production and consumption)
Space exploration (more specifically the extension of life beyond earth on a permanent basis)
Artificial Intelligence.
Rewriting human genetics
 
Clearly the guy thinks big. Unlike other students with big ideas however, Musk is realising them one by one. With the founding of Tesla in 2014 Musk helped create the first successful new car manufacturer in America in over 90 years. Right now, as CEO, Musk is on the verge of winning a 3/4 billion dollar remuneration payout as part of compensation plan that depended on the company achieving a six-month period of $100 million dollar market capitalisation. This would make him the most highly paid executive in US history. The incredible thing about this is that when Musk negotiated this contract, such a target was unthinkable. The company was only worth $60 billion at $250 per share back then. Musk made it happen, even though he's a part-timer dividing his hours between several other companies. The other somewhat unsung truth about Tesla's success is the way it is transforming the automotive industry away from the dealership model that has pervaded for over a century to a direct model where cars can be bought online. The low maintenance of electric vehicles is also challenging an industry that fed off consumers need for servicing and repair. Musk doesn't just compete in a market, he smashes it to pieces.
 
Musk also heads Space-X, the rocket-company he founded in 2002. In case you've been living under a rock, Space-X has been successful too, winning a number of private and public US defence contracts. By making as much of his rocket technology as reusable as possible, he has undercut the price of all competition for launching satellites. Musk has said many times he sees the future of mankind as multi-planetary. The idea is that by sticking only on planet earth, mankind could (in fact probably will) succumb to some sort of extinction event. Only by having colonies on other worlds can the human race escape such events and survive into the future. This is a lofty goal but one which Musk is edging towards. Again, one of the things that most impresses me here is how Musk is funding Space-X. One of the key planks of the strategy is the Starlink Internet programme, a network of satellites designed to bring Internet connectivity to all parts of the globe. As well as the much publicised plan to bring affordable Internet to poorer countries in Africa and so forth, Musk has another trick up his sleeve. The satellites will exchange data using line-of-sight lasers. Because space is a near vacuum and there is no medium in space to slow the light signals down, transmission of information will be even faster than the fibre optic cable used on the ground. This lack of latency is expected to be of extremely high value to certain commercial sectors that depend on timely information such as stock brokers. The premium service is expected to provide big bucks for Space-X to fund its future developments.
 
Somewhat crazily, these achievements in themselves would be remarkable enough, yet Musk continually applies his brain to disrupt other industries. Tesla's energy grid batteries are beginning to change the way electricity companies handle the storage of electricity, while boosting the future of fledgling solar and wind-power industries. The Boring Company is set to revolutionise travel by establishing a tunnel network that promises to reduce congestion and journey times. Tesla has recently entered the car insurance industry. By using the data from its own network of cars, Tesla can fine tune risk assessments allowing it to offer insurance at up to thirty percent less than its competitors who themselves are tentative about insuring Tesla automobiles because they have only been on the roads for a decade so the old school actuarial data they use is insufficiently mature. Neuralink is Musk's foray into the world of medicine, developing high bandwidth brain to computer interfaces. He also founded and Artificial Intelligence organisation called Open AI. (He's done all this and yet I have trouble finding something to blog about once a week!)
 
Doubtless in all these other industries, Musk has probably figured out the way to get them to pay for themselves, and has envisaged a sneaky way to undercut competition leading to a big disruption in an existing market.
 
The thing that most impresses me about Musk is that his innovations, which drive market change and arguably the direction society is taking, all take place from within the private sector. I'm a dyed-in-the-wool lefty who believes at some level, the state should be planning the future of society through policy, either with a totalitarian boardroom strategy like China or with a presidential "let's get man on the moon" approach like Kennedy. Musk is proving to me that isn't necessary. He's teaching this old dog (and many like me) new tricks! 
 

Fruit picking, a personal perspective.

Thoughts on fruit picking of an ex-pat whose ancestors were agricultural labourers for three centuries.
Fruit picking, a personal perspective.

One of the consequences of Brexit often visited by the media is the future of fruit and vegetable harvesting. The reporting comes in two stripes. The anti-Brexit media report the downsides of course. In a nutshell the 'hostile environment' created by the Tories towards foreigners and Brexit uncertainty has deterred immigrants from EU countries filling the seasonal vacancies in the industry. There are many reports of fruit rotting on the ground and farmers fearing they will be driven out of business completely or forced to relocate abroad. Then there is the Brexit positive media who claim this is all scaremongering. They report on the job opportunities for picking fruit in Britain soaring e.g. "£700 per week job boom" says 'The Sun'. Another common theme in the pro-Brexit media are reports about the development of fruit and veg picking robots, so clearly there is a fall-back in case Britain's youth don't care to relocate to a field in East Anglia to pick strawberries in July.

I've never picked fruit commercially myself. Well I owned a small-holding in Spain for a couple of years but apart from trading several tree-loads of olives to the local co-operative in exchange for virgin oil, I never sold anything, nor was I paid.
 
However that wasn't the norm for my ancestors. A friend of mine who is a whiz at these things came to stay for a few weeks and her parting gift was a family tree going back to 1740. For generation after generation my forebears were agricultural labourers.
 
I knew my grandfather was a farm labourer but not that the entire stock of my family were so as well, male and female. All lived and worked in the same village, Froxfield Hants for centuries. Grandfather Alfred though was a little different. He moved where the work was, over some considerable distance.
 
My father Edmund was born in Tolworth, Surrey in 1908. He told me he didn't see his father very often when growing up. Alfred did seasonal work which meant he was away for much of the year. One month he would be hop-picking in Kent, another harvesting turnips in Suffolk and so forth. Money was good when Alfred came back and my father and his seven brothers and sisters ate well. However one year, Alfred did not return. This was before the welfare state remember, there were no benefits to take care of single mothers with eight children, so the siblings who could work did, while my father and his younger brother George were found a place in Bizley Farm School, a charitable institution for borders, where the children would tend crops, manufacture wickerwork baskets, produce honey, cheese and so forth all of which was sold to pay for their farm education. 
 
Dad also picked fruit but he did so to survive. In good old Dickensian manner, the children at the school were largely fed on bowls of gruel, apart from Easter when they were treated to a boiled egg. My father and his friends therefore foraged in the countryside scrumping whatever fruit and veg they could find. They would trap birds, game, pigeons etc. A particular favourite was a hedgehog rolled in mud and cooked on a bonfire. It is a sobering thought that this is not a fairy tale from long ago - this is the real story of my father and these events took place less than a century ago.
 
Anyway, I didn't think too much about picking fruit again until in 2003 when my wife and I moved to Spain. We bought a country house in a small inland village in the north west of Murcia which is very much an agricultural economy. We became friendly with many of the local farmers and after a time, a picture of the black economy emerged. Fruit picking is obviously an activity where time is of the essence. As a crop is about to ripen, people have to be there in numbers not required throughout the rest of the year. In a somewhat 'backward' area of Spain at this time (by which I mean few people had email), there was an unspoken seasonal tradition. Come say, June, the apricots would ripen. A convoy of battered cars would arrive full of itinerant fruit pickers as if out of nowhere. At six in the morning the 'workforce' would gather at a point on the edge of town, and farmers would haggle to get the amount of workers they need at the lowest price. These people were working in black money so they would invariably earn below minimum wage, perhaps two to three euros per hour. After a twelve hour day in the blazing sun the workers would return to their cars, which were normally parked near the river where they could bathe and wash their clothes. This is tough work too. An Ecuadorian woman of my acquaintance appeared one day with her hand in a sling. When I enquired she said she had slipped from a tree and sliced off her little finger. She shrugged and said live goes on, explaining she needed return to work quickly to continue sending money back to her family.
 
As far as I could gather, the itinerant labourers in Spain have a similar lot to my grandfather. They move about, not just in Spain but in other EU countries, providing work where it is needed, often (mostly as far as I could see) in black money. There seemed to be a mix of Moroccans, Bulgarians and South Americans, all of whom had the common thread of being so far down the food chain they never get out of the black money trap.
 
However I have since seen another class of migrant workers in Spain with much better terms and conditions. Indigenous Spanish who are already in the system get much better 'gigs'. I knew a builder, a very industrious chap called 'ni' (short for Antonio) who would go to Switzerland each summer picking grapes, for which he got good money, stamp paid for etc. I understand that the building trade is quiet in Spain during the summer months so this is a popular way for workers who would otherwise be picking up unemployment to get some good money in. Now the Spanish unemployment money is not bad anyway so for this to be the case I reckon the Swiss money must be pretty good. I've heard of similar schemes where town halls in Spain organize groups of people to go fruit picking in France and Italy, again on legal money that is high enough to make it worthwhile. One woman told me she will be doing three months at 3000 euros per month and she will be taking most of that home. 
 
What these subjective, personal and somewhat random observations suggest to me is the future of the farming of fruit and vegetables in Britain is this. With Britain leaving the EU I see it as unlikely that the lot of fruit-pickers in Britain will get any better. On the 19 December 2019 the Johnson government published a revised version of the EU withdrawal agreement which no longer contains clauses on the protection of EU-derived workers’ rights. Robots aside (fruit picking robots are a long way from being viable), a demand for fruit pickers (which has apparently gone from four fruit pickers to each job to four jobs for each fruit-picker) will inevitably drive up wages, so I doubt the British supermarkets will accept the corresponding increase in the price of produce required by farmers for their operations to remain profitable. There are therefore two ways this could go. Either the government will takes steps to make the environment for the unemployed so unpleasant that they will be induced to chase low paid agricultural work to avoid starvation as my ancestors did, or alternative suppliers to British farms will fill the void on the supermarket shelves. The countries that may gain the most out of the latter are non-EU countries with low labour costs that are not the other side of the world and have climates that suit agricultural production. The British government has already had preliminary talks with several North African countries such as Morocco, Algeria and Tunisia and these may well be smart places for investment in a post-Brexit economy.