Sunday, December 31, 2006
Thursday, December 14, 2006
TradePoint offered an "online deal management software linking manufacturers, sales agencies and retailers", which will now be jointly marketed with DemandTec's retailer and manufacturer systems. According to the press release:
The combined solution from DemandTec, including the DemandTec TradePoint and DemandTec Promotion modules, is the industry’s first to combine consumer demand management and forecasting, promotion planning and optimization, and online collaborative deal management, all delivered via a software-as-a-service platform for both retailers and manufacturers.
Benefits to manufacturers and sales agencies include improvements in trade spend effectiveness and efficiency, improved demand planning, better forecast accuracy, efficient and accurate deal negotiation, streamlined deduction clearing and improved audit compliance.
Benefits to retailers include consistent deal management and billing across all vendors and brokers, integrated and controlled planning with vendors, improved promotion and category performance, better forecast accuracy and in-store service levels during promotions and improved audit compliance.
Tuesday, December 12, 2006
- 476,000 - Nintendo Wii
- 195,000 - Sony PlayStation 3
Pass the popcorn, and let's settle in to watch the battle.
But the real fun is with some of the really bad ideas. What were these people thinking?:
- Cheetos-flavored lip balm
- Salvadore Dali deodorant
- Diesel Jeans wine
- Chicken Soup for the Soul pet food
- Lamborghini notebook computer
- Willie Nelson Biodiesel Fuel
- Lance Armstrong's LiveStrong mutual funds
Sunday, December 10, 2006
Of those respondents to the survey who said they look at inserts (not all adults, therefore), the following are the percentages who looked at specific types on a regular basis:
- 79% Grocery stores
- 72% Dept stores
- 66% Discount stores
- 57% Home Building Centers
- 54% Home Electronics stores
- 52% Drug stores
- 48% Home Furnishing stores
- 44% Appliance stores
- 43% Sporting Goods stores
- 40% Computer stores
- 39% Office Supply stores
- 19% Cell Phone stores
In any case, the value of insert advertising to a supplier should, based on these results, vary considerably by channel of distribution.
Despite tanking circulation numbers, newspapers across the country plan to raise advertising rates anywhere between 3 and 6 percent in early 2007.Publishers want to maintain those 20% profit margins, and with circulation income down, they plan to make it from advertisers (and from the suppliers who fund the retail advertisers). They may find that advertisers feel differently, however.
"We don't want to pay more for less. We're certainly going to try negotiating rates. We take a lot of factors into the rates we are willing to pay," [a Macy's spokesperson] says.A big factor will be the many media choices now available. When I started in this business in the 70s, I worked for a department store where we spent about 90% of our budget on newspaper advertising. That has changed, and the change will accelerate if publishers continue to diminish their ad value.
An increasing factor, one serving buyers, says Monroe, is the increasing options now available to advertisers that did not exist 20 years ago.
That makes it easier for advertisers to resist increases, and it also makes it easier to look elsewhere for the same or better results.
"Media is not newspaper-centric any longer," he says. "If newspapers begin to charge rates that don't yield the results the advertiser is looking for, they will move to a medium that does."
The new effort follows up research conducted earlier this year with the In-store Marketing Institute in an effort to develop metrics.
Research was conducted on the metric in 2006 by a consortium of advertisers including 3M, Coca-Cola, Kellogg’s, Miller Brewing, Procter & Gamble, and The Walt Disney Company, in cooperation with retailers including Albertsons, Kroger, Walgreens and Wal-Mart.The service will be tested in early 2007 and rolled out nationwide later in the year, with global expansion to follow.
Wards is back only as a cataloguer and Internet site, however -- there are no stores and apparently no plans to build any.
Milgrom has built a $160 million-a-year company through a strategy of acquiring older, established domain and catalog names. A former lighting products supplier to Sears, Roebuck and Co.'s home furnishings catalog, he licensed the right to use Sears' name on catalogs after founding the firm in 1993 and now mails several Sears specialty titles, gifts book Charles Keath, its core HomeVisions catalog and Wards.I was impressed with the way they have captured Wards' look and feel on the website, which looks just like an old Wards circular. Apparently, it's working.
That may be happening in the case of Adidas and Reebok, if this article from the Portland Oregonian is a guide.
[In April] took over a licensed merchandise deal with the NBA from Reebok, acquired in January. Last week it started selling new fashion sneakers designed for each of the 30 NBA teams and has poured more money than ever into basketball marketing.
But perhaps Adidas' own Reebok, and not Nike, will be the biggest loser. Reebok, whose overall business is lagging in sales and order backlogs, has rapidly ceded market share in basketball.
Adidas' market share in basketball shoes has climbed, but so has Nike's. It's Reebok who has dropped.
"It's difficult enough to compete against everyone else, let alone having to compete against your brother," said Matt Powell, contributing editor for Sports Executive Weekly, an industry publication.
Also in India, following up on this post from a couple weeks ago, the Wal-Mart/Bharti venture is being looked at by the Prime Minister's office. Thus far, the departments responsible have cleared the proposal, but the government is expecting push-back from opposition parties and from retailers.
It's an exercise designed to address businesses' core concern: Compliance simply costs too much. But when the dust settles and final rules are adopted early in 2007, any changes are likely to have a modest impact on Corporate America's bottom line. Their real value, rather, might be peace of mind.Costs are apparently already decreasing as companies get a firmer grasp on how to do things. The estimate now is that compliance costs are about 0.25% of revenues, with best-of-breed companies at 0.14%.
The big change, rather than cost reductions, may be legal shields:
Without specific direction from regulators, companies fret that anything intimating even the slightest hint of a shortcut could leave them vulnerable to expensive shareholder litigation. It's that fear, probably as much or more than actual compliance costs, that's driving the call for change.The recent elections, putting in power a Democratic congress, mean that any changes will come from the SEC and PCAOB, not congress, "because lobbyists fear that reopening the law, especially in the new, Democrat-controlled Congress, risks making it worse."
That means the much-discussed changes to exempt smaller businesses from some provisions of the Act are less likely to happen.
Thursday, December 07, 2006
- Two top Wal-Mart execs, Julie Roehm (SVP-Marketing Communications) and Sean Womack (VP, Communications Architecture) are gone. Here's an Adweek article on it, and here's a piece from Media Post that offers some speculation on why Roehm is gone.
- Also, at Chrysler, Joe Eberhardt (EVP, Global Sales, Marketing and Service) is out. According to Media Post, it's in part because he "was at the heart of a dealer insurrection."
The Times says that Roehm and Womack were fired for having "a personal relationship that violated the company’s strict ethics policy", accepting gratuities, such as meals, forbidden by the company, and showing favoritism toward some vendors.
Apparently Draft FCB must have been one of the favored vendors, since Wal-Mart is putting the account up for review again and not permitting the incumbent to compete.
Roehm and Womack deny an inappropriate relationship and the other allegations, and Roehm says culture was more the problem:
Ms. Roehm acknowledged that her style and ideas did raise eyebrows at Wal-Mart. “I think part of my persona is that I am an envelope pusher,” she said last night. “The idea of change in general can be uncomfortable for many people, and my persona as an agent of change can prompt that feeling.”
In one of her first assignments at the retailer, Ms. Roehm transformed Wal-Mart’s traditionally stodgy shareholder meeting into a three-hour Broadway extravaganza, hiring a troupe of New York actors who sang songs like “The Day That I Met Sam,” the company’s revered founder.
The show elicited groans from longtime company executives.
Several weeks ago, Ms. Roehm courted controversy again when she oversaw production of a holiday TV ad, known inside the company as “Sexy,” that portrayed a husband and wife discussing racy lingerie in front of their extended family. The ad drew customer complaints and was immediately taken off the air, a person involved in the matter said.
Nothing like a good scandal -- especially when it involves both sex and money.
Gap has apparently tried to copy H&M and Target, by getting some big fashion names to design for them. Unfortunately, nothing much happened.
Of course, that may be because Gap forgot to promote:
Cynthia Sanner got to Gap Inc.'s New York store on Fifth Avenue two hours before it opened Friday to make certain she would get one of French designer Roland Mouret's dresses made exclusively for the clothing chain.
She needn't have bothered. She stood alone for an hour and 20 minutes before being joined in line by two other shoppers. "I was shocked," said the 35-year-old personal assistant from New York. "I thought it was going to be a mob scene."
Unlike Stockholm-based H&M's treatment of its designs, Gap didn't display Mouret's name in stores or windows or even on the clothing. "It's missed execution," said Mark Montagna, a New York-based CL King & Associates analyst who rates Gap "underperform."Oops.
Sunday, December 03, 2006
Just this past week, prosecutors in the Netherlands filed charges against Deloitte, Ahold's auditors at the time.
"The disciplinary complaint is lodged for acting as the accountant for the annual accounts of Ahold NV in the period from 1997 to 2002," the prosecutor's office said in a statement.
An Ahold spokesman declined to comment on the complaint, and officials from Deloitte could not immediately be reached for comment.
Okay -- that's a bit too cynical. Actually, I think it's probably true, regardless of who the sponsor is. And there are some really interesting nuggets (I got these from a write-up by the Center for Media Research -- I haven't had a chance yet to digest the full 41-page report), for example:
53 percent of adults used newspapers to make a shopping or purchase decision in the previous 30 days, while 27 percent used the Internet, which now is the second-leading source.However, there's also this: "A plurality among those age 18-24 consider the Internet to be their primary advertising source ..."
Another interesting point:
Sunday is by far the most likely day for about one half of shoppers to consult advertising, while Saturday is a distant second, noted by one-fifth of consumers. The only other days in double figures are Wednesday and Friday, at 13 percent each.Since weekday rates are typically 75% or so of Sunday rates, it would seem weekday advertisers are overpaying by outrageous margins. If I were a media buyer, I'd show this report (which is from the NAA, remember) and say, "If your Wednesday edition gets one-fourth the shoppers of Sunday, then I'm only going to pay one-fourth as much."
Wednesday, November 29, 2006
Jim Suddendorf has been named President at Gelco. "Suddendorf has overall responsibility for managing Gelco Trade Management Group throughout North America. Suddendorf joined Gelco in April of 2006 as chief revenue officer where he was responsible for managing current Gelco client relationships and for driving Gelco Trade Management Group revenues through new sales throughout North America."
Michael Forhez has moved from CAS to Bearing Point as Industry Director, Consumer Markets. "With more than 20 years of experience in sales, marketing and management in the consumer products industry, Forhez will be responsible for evaluating, developing and overseeing efforts to expand business and extend BearingPoint's presence in consumer markets."
Tuesday, November 28, 2006
It isn't clear how this will work within Indian law: "India does not allow foreign companies to open multi-product retail stores, [but] they can still make wholesale purchases to support their global supply chains." However, the companies say they will be in compliance.
India may soon have stores displaying the Wal-Mart brand despite government rules that prevent foreign companies from operating multi-product retail chains here.
The U.S. retail giant has tied up with India's top telecommunications company Bharti Airtel Ltd. in a joint venture that will set up hundreds of stores across the country, Sunil Bharti Mittal, chairman and CEO of the Indian company, said Monday.
However, this item from India's Economic Times indicates that Pantaloon, one of the biggest players in the Indian market, isn't frightened.
"The market dynamics will change but we are prepared and plan to scale up our number of Big Bazaar stores to 100 by December 2007, before any international retailer opens up its store here," Kishore Biyani, managing director, Pantaloon Retail India Ltd (PRIL), said here.
He, however, said it needs to be seen how the partnership of Bharti Enterprises with the international player unfolds.
"Wal-Mart will have an effect which will be a challenge for us. However, since the international counterparts have a different mindset, the partnership and strategy needs to be understood," he noted.
Apparently, 76% of college students read their campus paper at least once a week -- a pretty good penetration figure. And since college students are a fairly attractive demographic, advertisers are taking notice. And so are other media:
It's really not that surprising. The big metro dailies are doing badly, but smaller papers serving communities (and focusing their coverage on their community) are doing better. And college campuses are communities.
One of the most notable examples of the trend occurred in late summer, when a subsidiary of MTV, one of the country's best-known youth brands and part of the Viacom entertainment empire, bought College Publisher, a company that runs websites for about 450 college papers.
So solid are the economic prospects for the student-run newspaper at Florida State University, FSView & Florida Flambeau, that it was acquired in August by a mainstream newspaper, the Tallahassee Democrat.
"There's no more local paper than a campus paper," said Dina Pradel, general manager of Y2M, which founded College Publisher in 1999.
Put together a 5% decline in category sales over the past two years and the fact that 58% of toy sales are now through the mass/discount channel, and things look bleak for the last two toy chains (a similar combo of circumstances killed Tower and other music chains).
One attempted solution is to expand the definition of "toys":
Toys "R" Us recognized the importance of youth electronics over the past year. The new strategy: Add coveted merchandise, such as Fisher Price's digital camera (for ages 3 to 10), and get as many exclusives as possible, including a Black & Decker Jr. electronic workbench and a pink version of the VTECH Nitro notebook, a laptop with learning activities and music lessons aimed at young children.
"We were late to be on top of youth electronics and slow as an industry to innovate," acknowledged Ron Boire , US president of Toys "R" Us ...
"We got pigeon-holed in our view of what a toy was," he added. "We let ourselves be defined as a place that sells molded plastic."
Tesco, the UK's biggest supermarket chain, is taking two of its favoured British food suppliers along on its bid to open a new chain of small-sized supermarkets in the western United States next year.The logic seems to be that using established suppliers provides the benefits of familiarity, as well as meeting established quality standards.
Natures Way Foods, which produces prepared salads and lettuce for Tesco, and 2 Sisters Food Group, one of Britain's leading poultry processors, are both planning to establish sites adjacent to Tesco's planned distribution centre in southern California.
Tesco's decision to rely on established relationships with British suppliers rather than new relationships in the US is believed to reflect both its desire to avoid unpleasant surprises and a belief in the industry that the prepared meals business in the UK and Europe delivers higher standard products than are currently seen in the US.
Prepared meals – including salads and cooked chickens – are expected to be play a significant role in Tesco's plans to open about 150 small neighbourhood market stores around Los Angeles, Las Vegas and Phoenix.
I would imagine this is not good news to US suppliers in those categories who saw an opportunity with a big new customer, and instead get new competitors.
Saturday, November 18, 2006
The U.S. Securities and Exchange Commission and the board that regulates accountants will revise the Sarbanes-Oxley corporate governance law to lower compliance costs for public companies based on their market values, the SEC's chairman, Christopher Cox, said Thursday.The new guidelines appear to be oriented toward allowing companies to focus on materiality:
"In the next few weeks the United States is going to unveil significant changes to our implementation of a particular part of Sarbanes-Oxley," Cox said from London.
I'm sure everyone in the TPM biz will be watching anxiously to see what effect these changes might have/ Will "reliance on the work of others" mean that companies will have less need to recheck the work of their administrative services? Would that be wise?
The accounting oversight board will issue a new standard next month for how Sarbanes-Oxley audits should be conducted. The revision will instruct companies and auditors to focus on "what really matters, what's material to the preparation of the financial statements and to ignore what really isn't essential," Cox said.
Sarbanes-Oxley requires companies to hire an independent auditor to verify how well their procedures for publishing accurate financial statements work. The board's revisions will make audits "top-down, risk-based" and "permit reliance on the work of others," Cox said.
The new Thai government, which took over in a military coup, has pursued a protectionist agenda, with particular emphasis on protecting small businesses.
The Thai venture pledged in a letter to the government that it will not open Tesco Lotus Express stores smaller than 800 square meters, or about 8,600 square feet, "that are not currently under construction" as of last Friday and until Feb. 10, the company said in an e- mail response to questions. The move "does not affect" planned openings of new hypermarkets - larger combined supermarket and department stores, it said.
"The objective of this is to allow us to work with the minister, the retail industry and other interested parties toward a long-term solution which is acceptable to everyone," Tesco said. "During this time we hope to explain the benefits Tesco has brought to Thai consumers, suppliers and the economy over the past eight years."
Small retailers in Thailand, second- biggest economy in Southeast Asia, with 65 million people, are protesting the expansion of big supermarkets and small convenience chain stores into regional provinces. Retail chains including Tesco, Carrefour, and Thailand's Big C Supercenter and CP-711 are venturing into the countryside after growth in the capital Bangkok and neighboring suburban provinces slowed.
Friday, November 17, 2006
That's the latest in the Great Target-Disney War. Apparently, a memo went out early this month to all Target stores telling them to take the following actions:
- Remove all displays for the upcoming releases of Disney's Cars and Pirates of the Caribbean DVDs, replacing them with signage for rival releases.
- Remove all signage/displays for other Disney merchandise, such as Disney Fairies, Disney Princess, and Little Mermaid toys and apparel.
Now, according to the Wall Street Journal, Disney is cutting off shipments of the two DVDs to Target.
Next move is yours, Target.
UPDATE: I guess the next move was to de-escalate the situation. Target backed down in the face of the possibility of losing distribution of Pirates of the Caribbean.
Although apparently resolved, the fight underscores the continuing tensions between studios that are trying to move to the digital age by offering their movies for download and retailers that have been important partners in turning DVDs into a gold mine for Hollywood.
If Target had imposed drastically reduced shelf space on Disney, other studios would have been more reluctant to make their own cut-rate deals with Apple, which wants uniform pricing in its catalog. Rival studios are suspicious of the deal because Apple CEO Steve Jobs has become a major Disney investor and director — thanks to the sale of Pixar to the company.
A rapprochement was the best outcome for both sides, analysts said.
"It's like jockeying for positions in a long-distance race," said retail industry analyst Mark Husson of HSBC. "You throw some elbows, but you can't win if you're jockeying the whole time. A natural commercial accommodation is made."
The cost of manufacturing and materials for the low-end, 20GB version of the console comes to $805.85 ... That means that for every PS3 Sony sells for $499, it will lose $306.85 on components alone. Marketing and advertising costs would then boost the actual cost to Sony even higher.The federal anti-dumping laws (invoked most famously regarding steel imports) say that it is illegal for a foreign company to sell a product in the US at less than its manufacturing cost. The idea is to protect US companies from unfair competition.
Of course, we know that Sony is doing this because they expect to make any losses back on selling games and accessories (Gillette's famous business model: "Give away the razors, sell the blades"), but isn't this a case where the DoJ should (based on the logic of the law) file an anti-dumping suit to protect Sony's poor, disadvantaged US competitor -- Microsoft?
Thursday, November 16, 2006
"I'm not quite as convinced as others are that there is as big a problem associated with Sarbanes Oxley as some have suggested," said Mr Dodd.Dodd is not opposed to a re-examination of Sarbox, though: "At some point we're going to look at it. I don't know exactly when but obviously it's an issue that needs to be examined."
His comments come amid growing signs that senior figures in the US financial community, as well as some regulators, believe that "Sarbox" has received a disproportionate share of the blame for driving company listings away from the US.
Barney Frank, who will chair the House committee, thinks it "should be up to the Securities and Exchange Commission and Public Company Accounting Oversight Board, the accounting watchdog, to clarify guidance on how the law should be implemented."
Wednesday, November 15, 2006
Tuesday, November 14, 2006
Other retailers that Lampert is said to be considering as acquisitions are: the Gap clothing chain; the Home Depot home-improvement chain; Anheuser-Busch Cos., the world's largest brewer; automotive parts retailer Manny Moe & Jack, and RadioShack ...That's quite a list (since when is Anheuser-Busch a retailer?) Might as well add HoukTPM to the list. "Houk denied rumors that the giant consulting firm was on the block, but added, 'For the right offer, a couple billion or so, who knows?'"
Best Buy had their lawyers threaten a lawsuit to get their ad removed, but I suspect this wave is unstoppable -- there are several other such sites. And ultimately, Black Friday may recede in importance. With Wal-Mart beginning their price-cutting in October, it appears that just as the Christmas shopping season is starting earlier and earlier, so will the price-cutting season.
Someday the after-Christmas sales will start on December 1.
- About one-fifth of shoppers report that half or more of their grocery purchases are private label products.
- 41% describe themselves as "frequent" purchasers of PL products -- fifteen years ago, it was 12%.
- "Almost 70%" say that PL products are roughly equal in quality to national brands.
The study also found that shoppers are increasing their purchases of PL products outside the CPG area.
Approximately one-fifth of those surveyed reported that they frequently buy private label HBC products, home office products, household products, and home improvement products irrespective of the channel of trade in which they are sold.
Saturday, November 11, 2006
Do you think I can trademark "TPM"?
Supervalu Inc. and the National Grocers Association are fighting efforts by Wal-Mart Stores Inc. to trademark “EDLP,” which stands for its “Every Day Low Prices” strategy. Last week they asked the U. S. Patent and Trademark Office to reject Wal-Mart’s application.
They argued that EDLP is a marketing tool used by retailers throughout the country and that no single company has the right to use it to the exclusion of the rest of the industry, according to filings with the federal agency. Supervalu said it has used the wording “Every Day Low Price” in connection with its grocery stores since 1984.
Granting the trademark would unfairly restrict “everyone else’s ability to market and advertise their goods and services,” the grocers’ group said in a statement.John Simley, a spokesman for Bentonville, Ark.-based Wal-Mart, said the company wanted to trademark the acronym to prevent others from using it.
The big news in the past week was, of course, the mid-term elections. The Democrats taking control of both houses of congress will presumably have some major impacts on the nation as a whole, but how will it affect marketers?
Advertising Age offered some speculation, opining that there will very likely be an effort to limit marketing, especially of fast-food, directed at children. There could be curbs on prescription drug advertising as well.
The article being in Ad Age, it paid no attention, of course, to trade promotion or channel marketing; which is just as well, since on the rare occasions when they address channel marketing, they usually get it all wrong.
To be fair, though, there probably will be little effect on channel marketers, so Ad Age is probably justified this time in ignoring the subject. Though congress has oversight responsibility relative to the Federal Trade Commission, it’s unlikely they will use it to press Robinson-Patman enforcement.
It used to be a truism that Democrats were more enthusiastic about R-P than Republicans, which made sense because both Robinson and Patman were Democrats, as was the president who signed the law, FDR. But that was a long time ago, and recent history indicates that any difference between the parties on R-P is muted at best. The FTC under the two most recent Democratic presidents, Carter and Clinton, was not noticeably more active than when Republicans were in charge.
The two most recent FTC actions relative to trade promotion show a split in regard to the parties. There was a Robinson-Patman case pursued in the Clinton years – a minimum advertised price case against the recording industry for price-fixing on CDs – and there was a (half-hearted) investigation of slotting by the commission in 2000-03 (I served on a couple panels at their hearings), undertaken at the direction of the Republican-controlled Senate commerce committee. The findings could be summarized as “this subject needs further study,” and that was the end of that.
Overall, the record of both parties over the past couple decades indicates that enforcement of R-P in any significant manner is not on their radar. The one exception to this might be the possibility that hostility toward Wal-Mart among some groups might spur action. This is unlikely, but possible.
There has been some talk about possibly restructuring Sarbanes-Oxley – my bet is that this is off the table for the next couple years.
A representative of the American Association of Advertising Agencies was quoted in Ad Age as saying, "All in all, with the first open presidential election in years looming in 2008, Democratic control of either house will be characterized by high-level debates on popular issues. In the advertising, marketing and communications category, that leaves a lot of room for grandstanding.”
Grandstanding being something both parties are good at, it’s something we can always anticipate. But there’s little reason to expect much real action in the area of trade promotion.
Wal-Mart may be whimpering, and Federated Department Stores may be struggling. But both J.C. Penney and Kohl's Thursday announced better-than-expected third-quarter results, and bullish predictions about the quarter ahead.Good for them. But the amusing part of the report was this:
The company also said J.C. Penney benefited from the extensive marketing campaign for Macy's stores, which sent more people shopping at the mall.
Wednesday, November 08, 2006
Mattel Inc. said on Wednesday that its Barbie business will partner with cosmetics company MAC (Make-up Art Cosmetics) for an "adult-targeted project" that will be unveiled in the spring of 2007.I understand that the women they are targeting grew up playing with Barbies and presumably have strongly-positive feelings toward the brand. But still ... does that mean that they want to wear Barbie perfume?
The toy company declined to give more details on the partnership. Mattel does not currently sell Barbie cosmetics in the United States, although it does sell Barbie children's cosmetics in markets such as Europe, Latin Americas and Asia.
It said the collaboration is the first time that Barbie has partnered with "an adult prestige cosmetics company."
Mattel, the No. 1 U.S. toy maker, has been working to revive sales of its Barbie business amid difficult market conditions and stiff competition from MGA Entertainment's Bratz fashion dolls.
Still, what do I know? Next year Barbie cosmetics may be all the rage, and I'll be sitting here looking dumb.
There's logic in the approach: "By 2010, one-third of the population will be 50-plus," says Mr. Croncota. "Why would we turn away from them?" However, most apparel marketers have avoided using older characters in ads, figuring that even us boomers like to think we're still buff twenty-somethings.
Instead, he has taken the opposite tack. Under his guidance, Haggar has abandoned its previous youth-themed ad strategy and is acknowledging that Haggar is a brand for average, middle-aged men who don't read GQ and know nothing about the latest trends from Seventh Avenue.
The new strategy will be unveiled this week when Haggar launches the biggest advertising blitz in its 80-year history. Ads to run on TV, in print and online star ordinary-looking men between the ages of 30 and 45 in light-hearted situations. One pretends to advise on "throwing your daughter's boyfriend out the window," cautioning that if doing so, a man should wear a pair of Haggar pants with a Flexible Waistband. The style comes in handy "when you gotta grab a squirmy one," one of the characters says.
It will be interesting to watch the success of the campaign. And in any case, the ad and promo approach looks like fun:
As part of the campaign's antifashion theme, Haggar is financing a segment on a Fox Sports Network reality show. Eight older male models, dressed in Haggar duds, will be pitted against each other in such oddball challenges as a medieval-style joust on lawn mowers. In another challenge, "Paintball Posedown," contestants will pose as fashion models while a paintball gunman fires at them.
Two Southern California billionaires who had signaled interest in buying the Los Angeles Times instead joined forces Wednesday in a surprise bid for the entire Tribune Co., the Chicago-based parent of the Times and other media properties.I was invited to join in the buyout, but unfortunately all my spare cash is currently tied up in paying my kids' tuition.
The offer came from Eli Broad, a philanthropist who made his fortune in housing construction and investment services, and Ron Burkle, whose billions came from owning supermarket chains, according to a person familiar with the offer who was not authorized to publicly discuss it.
Further details were unavailable on the amount of the bid and whether the potential buyers would break up the company that owns 11 newspapers, including the Chicago Tribune, 25 television stations and the Chicago Cubs baseball team.
Sunday, November 05, 2006
The Tribune Company got disappointing preliminary offers for the whole company, so it's asking for bids on an item-by-item basis.
A deadline Friday for nonbinding preliminary offers resulted in bids valued at about the company's current share price, two people familiar with the process said Wednesday. That led Tribune's investment bankers to begin calling people who had expressed interest in bidding for particular assets to say such offers were now welcome.
Various people have expressed interest in such properties as the
Nobody, however, wants the Chicago Cubs.
It appears the problem goes deeper. This is from The Economist's weekly email newsletter:
Investigations widened on both sides of the Atlantic into the latest allegations of price-fixing among chipmakers, which this time focus on fast-memory SRAM chips. Sony said it was co-operating with an inquiry by America's Justice Department into industry-wide practices. Meanwhile, European regulators raided the offices of several chipmakers as part of their investigations. One of the companies reportedly targeted was Samsung, which was fined $300m last year by America after admitting to price-fixing in slower DRAM chips.
Wednesday, November 01, 2006
I'm sorry I had to miss the party, since I'm travelling and was in a client meeting all day (I'm posting this from the hotel), but I hope all the visitors enjoyed the cake and ice cream.
I checked the log files and found that we have had almost exactly 365 posts (actually, this is #367 if I counted right), though it's definitely not a post every day, nor was it planned to be.
The blog has been a lot of fun and a good way to communicate with people as an add-on to our newsletter, TPMupdate. I hope you enjoy it as much as I do.
Monday, October 30, 2006
The latest circulation reports say that the big papers continue their accelerating collapse:
This is the fourth consecutive semi-annual report to register a severe drop in daily circulation and -- perhaps more troubling to the industry -- Sunday copies. While the estimated decline 2.8% for daily circulation for all reporting papers may seem negligible, consider that in years past that decrease averaged around 1%. Sunday, considered the industry's bread-and-butter, showed even steeper losses, with a decline of about 3.4%.Some papers (we're looking at you, LA Times) are doing even worse:
The Los Angeles Times reported that daily circulation fell 8% to 775,766. Sunday dropped 6% to 1,172,005.I looked around on the web and found a circulation report from 1999, showing the LAT has dropped 28% (300,000) in the past seven years, from 1,078,000 to today's 776,000.
The San Francisco Chronicle was down. Daily dropped 5.3% to 373,805 and Sunday fell 7.3% to 432,957.
The New York Times lost 3.5% daily to 1,086,798 and 3.5% on Sunday to 1,623,697. Its sister publication, The Boston Globe, reported decreases in daily circulation, down 6.7% to 386,415 and Sunday, down 9.9% to 587,292.
The Washington Post lost daily circulation, which was down 3.3% to 656,297 while Sunday declined 3.6% to 930,619.
It becomes increasingly difficult for marketers to use newspapers as their primary trade promotion medium -- leaving little choice but to rely ever more heavily on in-store promotion.
Sunday, October 29, 2006
Nostalgia has led East Europeans to embrace the products they shunned in the 1990s, when the collapse of the Iron Curtain opened borders to goods from the West.Most of the old brands, though, now belong to western marketers -- Jar, for example, being a P&G product.
From Traubi (grape soda) in Hungary to Inka coffee substitute in Poland and Jar dish soap in the Czech Republic, brands created to replace capitalist products are now attracting consumers with disposable cash and credit cards.
The soap was the only dishwashing product available at the time and has stuck in people's minds, Norbert Racsko, an assistant brand manager at the Cincinnati-based company, said in an e- mail.
"It's a memory from childhood, and I even sometimes buy it," said Daria Spackova, 31, a film production manager.
Similar memories led Ildiko Nagy to teach her daughter the Traubi ad tune. "We love nothing but Traubi. We want Traubi," she sings, mimicking the ad broadcast on Hungarian state television 20 years ago.
"Traubi reminds me of my childhood, and I hope my daughter will remember it with her children one day too," Nagy said.
The Authentic Hispanic program offers various planograms including complete 4-foot and 3-foot dry grocery food and HBA displays of over 70 SKUs along with 10 beverage SKUs in the refrigerated section. The program features the most popular Hispanic brands such as Jumex, La Costena, Hershey Lorena, Nestle, El Azteca and more.It sounds like a great idea. The logistics seem iffy, though. The whole idea of a c-store is to have a very small range of very high-volume items at high margins. To add into their distribution chains another sub-set of items that either go into only some stores or, alternatively, go into stores where they won't sell, will present difficulties.
It will be worth watching.
Manufacturers are rated by retailers on:
- Clearest company strategy
- Most important consumer brands for retailers
- Best combination of growth and profitability
- Best sales force/customer teams
- Most innovative marketing programs
- Most helpful consumer/shopper insights and category management
- Best supply chain management
- Best shopper marketing programs
4. General Mills
Retailers are rated by their suppliers on:
- Clearest company strategy
- Best at store branding
- Projected power retailers
- Best retailers with which to do business
- Best category management/buying teams
- Most innovative consumer marketing/merchandising
- Best supply chain management
- Best practice category management/CMAR
10. Whole Foods
Wednesday, October 25, 2006
Wal-Mart is back at it, this time with another once-popular act with a still-big name -- the Eagles.
The Eagles and Wal-Mart Stores, Inc. today announced an exciting long-term strategic marketing agreement that will encompass sponsorship, exclusive audio and video releases, and product visibility.You'll pardon me, I hope, if I snickered a bit as I read this part of the press release:
The Eagles were attracted to a Wal-Mart partnership because of the retailer’s drive to take a lead in sustainability and make a difference for future generations.Without questioning the Eagles' commitment to the environment, one suspects that Wal-Mart's ability to move a ton of CDs might have played a role in their decision as well.
In any case, this is (yet another) nail in the labels' coffin.
In its lawsuit filed in a New York federal court, Coach alleged Target sold knock-offs of the Coach Python Signature Striped Demi purse, which typically retails for about $280. Some Target stores have been selling Coach bags for about $135.Interesting. Does this mean that Coach can't tell the difference between their own stuff and a knock-off?
Monday, October 23, 2006
At least that's what I got from this article.
Wall Street be damned, Hershey Co. is sticking by its theory that in-store marketing and promotion works better than advertising.The analysts are concerned about a quarter in which Hershey grew less than expected. However, their results have been consistently good over the past several years, as even the critics concede, saying that it's "hard to overly criticize Hershey given they've had such a good 3- to 4-year record."
Despite a slew of questions from analysts suggesting a link between the chocolate giant's recent decrease in ad spending and its lower-than-expected third-quarter sales, Hershey President-CEO Rick Lenny was adamant that Hershey's increase in consumer marketing next year will happen "closest to the point of consumption." Translation: in store.
Hershey's boss told the analysts:
"Marketing-mix modeling still reinforces that trade [spending] has the highest level of return on investment and then within consumer support ... those [efforts] closer to the point of consumption and point-of-sale tend to have the higher return," Mr. Lenny said in a conference call with analysts. In general, he said, Hershey uses advertising to create awareness for new brands and new platforms, but views in-store support -- whether through sampling or through activities tied in with retailers' own strategies -- as the best way to capitalize on those high-return investments.Music to my ears.
Tribune ... has asked bidders to submit nonbinding indications of interest by the end of the month ...
So far, three contenders have emerged: one group consisting of Madison Dearborn Partners, Providence Equity Partners, and Apollo Management; a second group consisting of Thomas H. Lee Partners and Texas Pacific Group; and Carlyle Group. It is unclear whether the latter will bid alone or join a consortium of buyers.
It's interesting that it is private equity firms, not media companies, lining up. Though I know little about investing (take a look at my portfolio if you doubt me), this seems to indicate that people might think the company could be worth more broken up, and therefore they'll buy it and sell off the pieces. Newspapers and TV stations, for all their pain these days, are still very profitable enterprises -- operating them as cash cows could work very nicely.
It will be interesting to see.
*Note: They also own the Chicago Cubs, but they'd rather not be reminded of that.
Sunday, October 22, 2006
A federal grand jury in San Francisco handed down indictments Wednesday against two executives from Samsung and one from a Hynix U.S. subsidiary, the Department of Justice said in a statement.
The indictment charges that Samsung executives Il Ung Kim and Young Bae Rha and Hynix's Gary Swanson participated in the conspiracy during 2001 and 2002, the government said.
Eight other execs from the two companies have already entered guilty pleas.
In all, four companies and 16 individuals have been charged as a result of the long-running memory chip investigation. The probe also has resulted in fines totaling more that $731 million.
Industry sources who have seen the numbers tell E&P they anticipate that for the six months ending September 2006, top-line daily circulation will fall roughly 2.5% while Sunday will drop approximately 3%.And it's no better in the broadcast biz, where NBC has just announced $750mil in budget cuts.
The declines keep coming, even after several periods of losses -- and easier comparisons that were supposed to ease the slide.
Yet again, major metros are expected to shoulder most of the blame for the decline in numbers. Sources suggest that some major papers that got hit hard in the recent past will take it on the chin again. They also point to a decline in single-copy sales and the continuing impact of many papers reducing other-paid and third-party copies.
NBC Universal plans to cut US$750 million in operating expenses by the end of 2007 by eliminating employees, cutting back on scripted shows, and slashing its news budget, according to a report Thursday in the Wall Street Journal.
The moves come as more and more viewers and advertisers gravitate toward new media, NBC Universal chairman Bob Wright told the newspaper. He said the moves would restore the company to double-digit growth next year.
"The first supercenter is a serious, impressive effort by Wal-Mart, unlike anything it has attempted (except experimentally) in the U.S.," Caicco wrote in a research report. "It is working hard to develop a hybrid discount shopping experience that will match up well with the needs of Canadians, and is also introducing products to support its position."The analyst thinks Loblaw's, Canada's leading supermarket chain, will be hurt:
He believes that Wal-Mart Canada will adopt a regional (as opposed to national) pricing strategy, matching discount stores on at least 200-400 core items, while making aggressive pricing "statements" on a few important categories. All other items should be priced at least 10% below conventional players, he added.
... a key difference between the two companies is that, as Wal-Mart has pushed its core general merchandise business forward while methodically expanding into food, Loblaw has let its core food business "stagnate" in its effort to broaden its general merchandise assortment ...India: Forbes reports more on the battle among Tesco, Wal-Mart, and Carrefour to partner with Bharti in India. We reported on it here last week.
In addition, the International Herald-Tribune reports on the effect of the coming superstore invasion on the 12,000,000 mom & pop stores who currently hold 95% of the Indian grocery market.
I was fascinated by the fact that 40% of Indian produce currently goes to waste and never reaches the consumer, because of the inefficiency of the supply chain. What could lowering that percentage significantly mean in terms of alleviating hunger, and lowering prices to India's poor?
Small shops are chronically wasteful, lifting prices 20 percent higher than they are in big stores. They buy in small quantities. They have no expertise in inventory control and category management, so they fail to buy the most profitable mix of products: At Nutan Stores on Carmichael Road in Mumbai, a typical operation, the offerings include such slow-moving items as dipping ink, birthday candles and oil pastels.Of course, those millions of mom & pops are going to feel some pain.
Devraj Damji Pasad, a 63-year-old co- owner of the store, said the arrival of a single supermarket a few miles away had cut his store's sales by 60 percent, forcing the dismissal of 7 out of 11 workers. He used to sell 36 bottles of ketchup a month, he now sells fewer than six.It will be a period of tremendous gain and pain:
But small stores are still indispensable to Indians. They provide credit. They deliver 20 cents worth of medicine to a home at midnight.Australia: Coles Meyer has turned down another takeover offer, and this time it appears to be final.So a war is gathering between the efficient but sterile supermarket and the neighborly but wasteful mom-and-pop store.
Last month, we reported on rumors that Wal-Mart and Tesco might be interested in buying CM.
Australia's second-largest retailer knocked back a revised takeover bid from the syndicate headed by Kohlberg Kravis Roberts (KKR), saying the $18.2 billion offer still substantially undervalued the business.
The group, which had been chopped down to five members from the original nine, gave the board a deadline of 9am on Monday to decide on the $15.25 a share offer.
However, after again being rejected by the Coles Myer board, the KKR-led syndicate announced after the market closed on Thursday that it had withdrawn its proposal.
As the quote implies, these shoes are being marketed as being not only stylish, but equal in performance quality to the high-priced brands. Nike seems to be trying to match the upstarts, using its Starter brand:
Sneaker shoppers accustomed to ever-escalating prices may be facing another kind of sticker shock this fall, with the launch of some inexpensive sneakers that make controversial claims to rival expensive shoes in quality.
Payless ShoeSource Inc. last month unveiled a running shoe called "The Amp" that sells for about $35. Payless says that the shoe performs like running shoes that cost nearly three times as much, and that it can even be used to run a marathon -- a rare claim for an under-$40 shoe.
Another company trying to challenge the dominance of $100-plus sneakers is Steve & Barry's University Sportswear, a retailer of low-price shoes and apparel that recently released a shoe under the name of NBA star Stephon Marbury that it says integrates "the same performance attributes found in sneakers sold for $100 or more." The price: $14.98, a fraction of the $125 Nike Zoom LeBron III.
Nike itself has a foot in the low-price game: Two years ago, it created a unit devoted to selling low-price footwear and apparel under the Starter brand it had acquired. The first line of sneakers, endorsed by Green Bay Packers quarterback Brett Favre, started selling in 400 Wal-Mart stores last year for under $40, though they aren't pitched as rivals to its higher-price lines.On a trip to Wal-Mart today, I checked their shoe section, having just read this article, and saw that they have several Starter SKUs in the $18-$25 price point.
Athletes, however, don't seem to be buying into the low-price gambit:
Competitive runners, in particular, are finicky about their shoes and often swear by the fit, cushioning and special features of more-expensive brands. Chris Demetra, a 26-year-old Nashville, Tenn.-based financial analyst who runs about 70 miles a week, says that while he might consider a $35 shoe, he would be concerned about injuring himself. Runners, he says, are "always looking for the perfect running shoe. Once they have a shoe they're comfortable with, they're not that concerned with price."Those of us who run significantly less than 70 miles a week might look at things differently, however.
The under-$50 category makes up over half the sneaker market, while over-$90 is only 8%, according to NPD. What NPD doesn't tell us is how much of the shoe companies' margins are delivered by the high-priced shoes.
Tuesday, October 17, 2006
Motorola went CPG -- appointing a former Heinz and P&G exec, Casey Keller, as CMO.
Mr. Keller, a P&G veteran, joined the H. J. Heinz Co. in 1998 and rose in late 2002 to chief growth officer. In that role, he oversaw a $200 million marketing budget for Heinz's lineup of ketchup, frozen foods and sauces. Subsequently, Mr. Keller was advanced to chairman-CEO, Heinz Italy, and president of Heinz Southern Europe. At P&G, he served as marketing director for U.S. Snacks and on global development for Pringles.The Bon-Ton, meanwhile, grabbed a consultant, Michael Hayes, to be svp-marketing:
Hayes most recently served as senior manager in the retail practice of Accenture, a management, technology and outsourcing consulting firm, where he led projects for Best Buy, J.C. Penney, Home Shopping Network, Sara Lee Branded Apparel, Saks and Walgreens.
Retail behemoth Wal-Mart Stores is set to buy a Chinese hypermarket group for about one billion dollars in a deal that would make it the leading chain in China, the Wall Street Journal said.Wal-Mart has 61 stores in China, Trust-Mart has 100. The plan is to take over the Trust-Mart stores in chunks over the next three years.
Citing people familiar with the transaction, the business daily said the US giant had agreed to purchase the Chinese hypermarkets of Taiwanese-owned group Trust-Mart.
If approved by Chinese regulators, the deal would take Wal-Mart past its French rival Carrefour in the number of hypermarkets in China. Carrefour had also tried to buy Trust-Mart, according to the newspaper.
Sunday, October 15, 2006
After 37 years of subscribing to the daily newspaper, I wrote "cancel" on the last bill and sent it back.
Since I've been subscribing for nearly four decades, it's obvious I am not a member of the young demographic that newspapers haven't been able to attract. Print journalism is a) low tech and b) costs money. Neither is appealing to young people who grew up with the Internet and can customize their information intake and get it without a subscription fee. I'm in the age group that is still reading a daily newspaper out of long habit.
The points she makes are very similar to those I posted when I cancelled my subscription last year. The continuing collapse of newspaper circulation, as I noted in my post, presents serious concerns to trade marketers.
However, asks the article:
How can a retailer differentiate from Wal-Mart, create a strong brand image, compete on price and be everything to all of its consumers at once? Some say Target doesn’t know the answer quite yet, some say it’s on its way and others banter about whether or not Target knows the right strategy at all. Is the $52.6-million retailer on target?It's a good article, that attempts to answer these questions (it's lengthy, and excepting it wouldn't do it justice).
Home Depot has had a shake-up in its marketing ranks. Roger Adams is the new CMO -- the position has been vacant for a year. The exec-vp of merchanding & marketing is gone, as are a couple of other top folks.
Ahold's former marketing director has gone on trial for fraud. According to the government, he "booked whatever amount in income that they needed to make their targets."
Winn-Dixie looks like it will be out of bankruptcy soon. The question, as noted in the article, is whether they've figured out a way to compete with Wal-Mart. If not, how long before the next filing?
Wednesday, October 11, 2006
CompUSA is doing a "back to the future" bit -- bring back a former CMO
The company, privately owned by Grupo Carso, named Ellen Miller its acting chief marketing officer. Miller, who is currently president of Insider Marketing, worked at CompUSA from 1990 to 1994.... and, with her, an old campaign.
On Oct. 22, the company will launch a new radio ad campaign based on the "PC Modem and Bob" campaign it used in the early 1990s, ditching the PC Modem character for a female character named Meg Pixels. The company, which said it believes there is still "tremendous equity" in the old campaign, would only describe spending as being in the "multi-million dollar range."Good luck, CompUSA. To reiterate one of my favorite points, I'm afraid their problem is that they are #3 in a two-horse race.
Meanwhile, Hyundai's VP-Marketing is gone after only a year on the job:
Her departure comes after Hyundai reported September sales fell 13 percent to 33,384 vehicles compared to the same month a year ago.
But we came across a quote from Target that caused a regrettably loud snort:
'Target does not object to competition, but we do expect a level playing field upon which to compete with the online services,' the company said.So, let me ask, Target: Do you also believe in a level playing field for small retailers when it comes to trade promotion allowances?
My, aren't the crickets noisy tonight?
Bharti Enterprises is talking with several international retailers -- Tesco, Carrefour, Wal-Mart, Metro -- for a partnership. The idea would be to gain market experience and be ready when the expected legal changes take effect in a few years.
Disney, meanwhile, has found its partner, the Jaipuria Group:
Walt Disney Co. has partnered with an Indian company to sell its products in India as part of efforts to expand its presence in one of the world's fastest growing markets, a company official said Monday.Disney also recently bought a children's cable channel in India.
Monday, October 09, 2006
The company was sold off to a liquidator, who outbid rival music retailer Trans World Entertainment, which had planned to continue to operate the stores.
The sell-off of Tower's inventory, valuations of which run as high as $200 million, could have a wide-ranging impact on the music business at large. The company's West Sacramento, Calif., warehouse is filled with product from the vendors of its independent distribution company, Bayside Distribution, and its accessories suppliers. Companies with a high degree of exposure could be dealt a serious blow when their product is returned for full wholesale cost.The closure of Tower further narrows the retail marketplace, especially as it relates to "genre" music and non-hits in general.
Target sent a letter to large film producers last month stating that it wants "a level playing field" when it comes to movie pricing, according to the report. The Minneapolis-based discount retailer said it might reduce DVD shelf space and marketing efforts if online services get better deals.Wal-Mart and Target (who between them account for more than half the DVDs sold in the US) are apparently upset about a deal between Apple and Disney (the Steve Jobs connection) giving iTunes the right to sell Disney films for $12.99.
Could get interesting.
The question is whether there's a lot of value to building consumer awareness of a brand that markets its products primarily to businesses (Cisco's major consumer line is under the Linksys brand name).
Bostrom argues that more of Cisco's corporate products--such as voice over Internet Protocol phones, Wi-Fi handsets and unified communications software--are finding their way into the hands of consumers by way of their corporate IT departments. And she believes that these people, who purchase a lot of gadgets for personal use, have a big impact on which technologies their employers choose to buy.
"Technology that we use in the office is seeping into our everyday lives," she said. "And technology decisions that used to be made by the enterprises are now being driven by end-user demands. It's these end users who are encouraging the technology decisions at work."
If you read the article, though, and others (noted below) on other stores, Federated sales increases were poorer than almost all others major retailers -- retail generally had a great month.
JC Penney +10.2%
Only Wal-Mart, in this grouping, did poorer than Federated. My observation (I don't have numbers to support it), is that the department store sector does reasonably well when the economy is strong, but sinks during weak economies -- and each down cycle over the past few decades has seen them sink to ever-lower levels.
So, although Federated may be looking like it's doing reasonably well at present, it needs to do better than this while the economy stays strong. (I admit to being a skeptic about department stores generally, and Federated in particular, so take my opinions with a grain of salt).
By the way, if those Wal-Mart numbers aren't an aberration, and if Wal-Mart US starts looking like Germany, Korea, Japan, and UK, then things could get ugly in Bentonville.
Friday, October 06, 2006
Tesco said it would offer six packages, including office software, security systems and a photo editing tool.In other Tesco news, the company is planning to vastly expand its overseas operations -- most notably in China and, of course, the US.
Britain's biggest retailer said each title would cost less than £20, challenging what it described as the current "high" price of PC software.
By February Tesco, which launched overseas ten years ago, will have 60 per cent of its store space abroad — and that is before it opens a store in America, a country in which Tesco has committed to spending £250 million of capital.
The boost will come via innovations in the beauty and color cosmetics category, skin and suncare products and by building three brands—Calvin Klein, adidas and Rimmel—to the billion-dollar mark. The growth strategy also includes increasing its presence in Asia.The plans, while ambitious, don't appear unrealistic. Coty has doubled in sales in the past five years.