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An Act of Super Bowl Desperation

By Jeff Clark
Tuesday, January 30, 2007

Is it a brilliant marketing strategy or an act of utter desperation?
 
At a cost of $2.3 million for 30 seconds, Super Bowl commercials should have mass appeal to the legion of male couch potatoes. Some products – like beer, soda pop, pizza, and Viagra – are perfect sponsors.
 
But some products just don’t belong.
 
Several years ago, Gardenburger spent its entire annual marketing budget on a Super Bowl spot advertising its vegetarian hamburgers. As you might imagine, marketing meatless burgers to the nachos-and-pizza-roll crowd went over about as well as having Grandma jump out of a cake at a bachelor party.
 
Gardenburger’s stock peaked on the Friday before the Super Bowl and then slowly but surely wasted away to nothing.
 
This week, I’ll be keeping a close eye on shares of Garmin International (GRMN).
 
Sometime during the second quarter of the big game, Garmin will unveil the latest marketing effort for its portable navigation devices. The commercial features a lost motorist who struggles to unfold a map. The map turns into “Maposaurus” – a dreaded map monster that takes over the car and torments the lost motorist.
 
Another motorist, armed with a Garmin navigational device, morphs into a superhero and then battles and defeats the monster.
 
It’s an amusing commercial. But should it air during the Super Bowl?
 
I mean, how many of the directionally challenged among us will wipe the Cheeto dust off our fingers and rush out to spend a few hundred bucks so we won’t ever have to look at a map again? Somehow, I doubt it’ll be enough to recoup the $2.3 million worth of airtime.
 
And that leads to the bigger question... just how big is the market for portable navigation devices?
 
I have a GPS device built into my car. But honestly, the only time I've turned it on was when I accidentally hit the wrong button trying to change the radio station. And if I haven’t needed to use a GPS device while driving in my car, I can’t imagine a situation where I’ll need to carry a portable navigation device with me.
 
Furthermore, in addition to music and television, you can download directions right to your cell phone. Why would you crowd your pockets with a GPS device?
 
So is the decision to advertise during the Super Bowl a stroke of marketing genius? Or is it a “Hail Mary” pass thrown by a single-product company in a desperate attempt to capture a few additional sales before its device is rendered obsolete?
 
I guess we’ll know after next Sunday.
 
Best regards and good trading,
 
Jeff Clark




Market Notes
Strength in the steel sector... Steel Dynamics, Allegheny, AK Steel, Chaparral Steel, and Kaiser Aluminum at 52-week highs.
 
Major food producers Tyson and Dean Foods hit new highs.
 
Earnings today: Chicago Mercantile Exchange, Merck, UPS.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 37.77 +1.5% -2.8%
Gold 135.20 -0.1% +13.4%
Silver 27.93 +0.4% +47.9%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 19.39 -9.2% -8.2%
Gold Stocks 564.53 +1.3% +10.6%
10-Year Yield 3.00 +1.4% -9.6%

World ETFs
Symbol Price
Change
52-Wk
USA 122.56 +1.3% +10.2%
Canada 30.44 +1.3% +13.8%
Russia 21.63 +2.3% +16.7%
India 37.73 +1.9% +20.0%
Israel 16.47 +0.9% +9.7%
Japan 10.58 +1.0% +7.4%
Singapore 13.88 +1.0% +19.2%
Taiwan 14.72 +1.6% +17.8%
S. Korea 56.56 +1.7% +22.8%
S. Africa 70.85 +3.9% +22.9%
China 45.06 +1.4% +0.1%
Lat.America 52.82 +1.4% +6.7%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 136.18 +1.5% +14.8%
Big Pharma 64.13 +0.6% -3.3%
Internet 72.13 +0.7% +22.3%
Semis 16.03 +2.1% +28.9%
Utilities 31.21 +0.3% +1.6%
Defense 18.51 +1.3% +10.1%
Nanotech 9.99 +1.3% +0.0%
Alt. Energy 9.95 +1.4% -4.4%
Water 18.31 +1.1% +12.2%
Insurance 16.07 +1.2% +18.3%
Biotech 20.58 +1.1% +27.1%
Retail 19.65 +0.1% +28.4%
Software 24.59 +0.9% +24.1%
Big Tech 53.73 +1.0% +21.9%
Construction 12.99 +2.1% +13.3%
Media 13.57 +1.1% +25.0%
Consumer Svcs 67.26 +0.8% +23.3%
Financials 54.87 +2.4% +5.2%
Health Care 64.22 +0.7% +1.3%
Industrials 63.25 +1.6% +19.7%
Basic Mat 73.57 +1.6% +21.6%
Real Estate 55.24 +1.4% +23.8%
Transportation 91.17 +1.4% +25.6%
Telecom 22.48 +1.1% +17.1%

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