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.