Questions.

How do they predict how consumers will act? It can't be as simple as regular statistics. Aren't people less predictable such that you aren't able to use the methods of regular statistics? Or are people so predictable? Is it because they look at previous years? But what about the recession? Do they just look at what consumers have done in previous recessions, and adjust their data accordingly? I'm very curious.

On Small Businesses

So last Wednesday I was in the library, studying for my chem exam on the third floor. I was sitting next to some dudes who started talking about business stuff. Although I was entranced with reviewing for chemistry, I had no choice but to eavesdrop. They talked about the Cupcake Cafe, a small cafe that sells cupcakes in Rexburg, and wondered how it stayed in business and discussed how profitable that kind of business could be and how long something like that could last.

I was on the internet today, reading, and found this article in the New York Times:

http://boss.blogs.nytimes.com/2009/11/25/are-cupcakes-a-viable-business/

Are Cupcakes a Viable Business?

We just published a story by Elizabeth Olson that takes a look at the Great Cupcake Rush of ‘09, an almost inexplicable spread of cupcakeries around the country. As Ms. Olson reports, a handful of chains — Magnolia Bakery in New York, Sprinkles Cupcakes in Beverly Hills — seem to be thriving but for many others it’s a struggle.

Porche Lovely, for example, opened Lovely Confections Bakery in a gentrifying district of Denver. Ms. Olson writes:

For each cupcake she sells, Ms. Lovely figures she spends 60 cents on ingredients, 57 cents on mortgage payments and utilities, 48 cents on labor, 18 cents on packaging and merchant fees, 16 cents on loan repayment, 24 cents for marketing, 18 cents for miscellaneous expenses and 4 cents for insurance. That totals $2.45, leaving a potential profit of 55 cents on each $3 cupcake.

So far, that profit margin is theoretical because Ms. Lovely is still paying off her start-up costs. She’s reluctant to predict when she may become profitable in part because of the economy — but also because cupcake competitors have been opening in her neighborhood.

What is it that makes this business so attractive to would-be owners? What chances do they have of succeeding?

I liked comment number 5:

When I saw estimated costs per unit in the original article my instantaneous reaction was that there was no way that Ms. Lovely will succeed in the marketplace. Breaking down the numbers reveals shocking poor cost control, take for instance that she estimated that it cost her 48 cents per cupcake. Lets assume that she is paying her employees $15 an hour, at 48 cents per unit each employee is responsible for roughly 30 cupcakes an hour! Either she is overstaffed, overpaying or underselling. There is no way that her current business model will succeed, plus how big is the market for $3 cupcakes? It seems like people get into this business out of some sense of comfort and reconnection, undoubtedly they fondly remember baking cupcakes with there family and want those senses to translate to there business ventures.

— Ryan
Also number 9 and 10:

Yet another fad. In a few years, when there are cupcake bakeries everywhere and some mega-franchise, they will have the same fate as all the Curves gym locations around here: boarded up.

— JenofNJAs someone who bakes, it takes more time to make a cupcake than it does to bake a double layer cake- don't kid yourselves, it also has to do with our sugar addiction - we're paying more for someone else giving us portion control, like those little 100 calorie snacks - about one of the worst ways to eat green around.....as for a business model -- there are some who will always thrive because they can spot future trends and some will die out....the darwinian cupcake model-Laura Greenberg
I've wondered about this kind of thing too: how the heck do small businesses stay in business with the low profit margin? I remember that the people I was sitting next to mentioned Walmart, and how they didn't make money from the price of the items that they sold, but from the amount of items that they sold. I've also had a friend tell me that because Walmart is so large (or something like that), they buy things in large quantities, and when you buy things in large quantities, they're cheaper. Also, everyone wants to sell to Walmart, because Walmart sells to everyone, and if Walmart doesn't like the price that the seller is offering, they are more able to negotiate it lower, since the seller would make a lot of money from Walmart either way, and if the seller went to a smaller business, they would make less money. 

Isn't that interesting? I can't wait until I get to learn about this stuff.

On a side note, I dissected the turkey today. I found a major artery that extended down its spine, I found its spinal cord, I found what I think is either the pulmonary artery or the aorta, I found its scapulas (they're weirdly shaped), I found a tendon that moved the wing. I scraped off nearly all of the meat and fat and tendons and ligaments, and I cut into a few of the bones with a saw. I even boiled the bones to try and get everything off of them. Nobody was near as excited as I was; in fact, everyone but dad was grossed out. Lamesauces. It was cool. It was really cool. I learned about bird and human anatomy.

Happy Thanksgiving! I'm going to go read more stuff.

More interesting stuff

And this too:

Encoding specificity principle

Description

Have you ever been upstairs, wanted something that is downstairs, gone downstairs and then forgotten what you wanted. In fact it is only when you go back upstairs again that you remember what it was that you wanted.

When you store something in memory, the memory is not just of the item being stored but also of the context in which the memory occurred. Recall and recognition thus may be triggered by elements of the context being present.

Discussion

Tulving (1982, 1983) linked storage, recall and recognition by the principle that context is a unifying factor. In his words:

The probability of successful retrieval of the target item is a montonically increasing function of informational overlap between the information present at retrieval and the information stored in memory.

Isn't that just cool?

Something Interesting

From my readings for class:

Music makes a mark on your brain/body. The musical pattern acts as a trigger for emotions

and thoughts. You have heard about Elder Packer telling you to sing a hymn when your

thoughts are no quite where they should be. There is great wisdom in this advice. The singing

will change your neural patterns involved in emotions, thoughts, and behavior. The music

marker helps to reason clearly based on emotions. This may sound strange, but emotions are

not disconnected from reason. The idea that they are separate comes from the philosophy of

Descartes, an influential Frenchman, and from others before him, such as Plato. We will not

get into a deep analysis of those philosophies. Let’s just be content that neuropsychology has

shown that when persons are not able to feel emotions, they are also incapable of reasoning

properly (see the work of Dr. Damasio and Mr. Phineas Gage case). This is very pertinent

because music creates powerful emotions among the general population (Grabrielson and

Lindstrom, 1993). In fact, Frey (1985) showed that in a sample of adults, about 8% of the

crying episodes in their life were caused by music alone. You can look at this way: let’s say

you cry 10 times this year; about 1 time out of 10, the crying will happen while/because your

are listening to a musical piece.

Isn't that interesting? 

So I looked up some research:

http://cercor.oxfordjournals.org/cgi/content/full/10/3/295

The Emotional Mechanism that Biases Decision Making is Distinct from the Emotional Mechanism that Improves Memory

The previous discussion leads to the question of whether the mechanism by which emotion improves memory is the same as, or different from, the mechanism through which emotion biases decisions. The amygdala has been found to be necessary for emotions to improve memory (Cahill et al., 1995). Our own work has also shown that the amygdala is important in the creation of biases and in decision making (Bechara et al., 1999a). This suggests that in the amygdala, the mechanisms through which emotion modulates memory and decision making may be inseparable. The remaining question is whether these mechanisms might be separable in the VM cortex. In order to answer this last question, we tested 12 normal control subjects and six VM patients with anterior lesions that spared the basal forebrain for their memory of a series of neutral and emotionally charged pictures. The series of pictures involved four sets, with four pictures in each set. Each set of four pictures contained two neutral (e.g. farm scenes)and two emotional (e.g. raped and mutilated bodies') pictures. The pictures in set 1 were presented once each; those in set 2 were presented twice each; in set 3, four times each; and in set 4, eight times each. Five minutes after viewing all the pictures, subjects were tested for their recall of each picture they saw, and for the overall content of the picture. The recall of picture content was calculated for each subject as a function of repetition times and emotional content.

As might be expected, both normal controls and VM patients showed improved memory as a result of repetition. The most important finding, however, was that both groups showed a response to the emotion manipulation, producing a better memory curve for pictures with emotional content than for neutral pictures (Fig. 8). Thus, this experiment actually separated the memory curve that is a function of repetition from the curve that is a function of emotional content. The results indicate that the VM patients are able to use emotional content in order to enhance their memory, suggesting that the mechanism through which emotion modulates decision making is different from that through which emotion modulates memory. These results also support the conclusion that the decision-making impairment of VM patients cannot be explained by a deficit in the recall of emotional events.

The second-best thing that's happened to me this semester:

I get to go home for Thanksgiving.

The first-best?

Getting on FastGrad.

The third-best?

Getting the one A out of the whole class on my first trig test. 97%, baby. And he let us correct two missed problems, and since I only missed two problems, I got a 100%. But I earned a 97%. Yeah. YEAH!

I miss summer.

Life was a bit more beautiful then.