A fitting repartee?
Test drive a Toyota at a GM dealership!

(column by Karan Mehrishi)

The American aversion to its own cars has been a world renowned co - nundrum. Analysts have used almost all their grey cells to reach a consensus but to no avail. The Japanese-induced quagmire has brought about unanticipated losses for the Detroit ruler (General Motors). Now that the Japanese are selling their cars on a set perception that revolves around value, the Americans are rethinking their business strategy. Rather than fighting the competition through advertising mediums, GM has instructed its Saturn dealers to take the competition to the next level by stocking rival cars (not for sale though). GM is apparently Confident that in a side by side comparison, its products will in fact fare better.

The move underscores GM’s fears that sales could be jeopardised by rival dealerships. It is believed that in order to win customers, dealerships often indulge in falsifying information about rival products, thus misleading customers. States Emmanuel Bulle, Analyst, Fitch- Ratings, “Such moves may occur when companies are pretty confident about the success of their products.”

Such practices have been sighted to be major contributors to GM’s dwindling market share. This way, the haranguer strategy of GM rivals will be in check, but of course, the real challenge is to short circuit Toyota’s meteoric march to the number one crown... and that remains a long road ahead...

(End of Karan Mehrishi column)

Home is where the heart is?
Haier not invincible in homeland China!

(column by Pallavi Srivastava)

Wth global sales of $12.8 billion, Haier, has become the world’s fourth largest home appliance maker. This global dream, however, seem to be hitting on the company’s local performances. Its market share in the Chinese refrigerator segment, for instance, fell to 25.6% in 2005 from 29.1% in 2004. The brand that was rocking the Chinese appliance market till a few years ago, is fighting to retain its market share from fierce domestic and international competition.

The irony is that Haier, the brand which is proving to be a headache for global giants like Whirlpool, GE and Electrolux on the international platform, is getting troubled by the same brands in China. After failing earlier, Whirlpool is back in action with its Chinese made appliances and a stronger distribution strategy. As if this was not enough, local Chinese brands are already troubling Haier by their competitive pricing strategies. Haier is facing a two-way assault in China.

The major reason for Haier’s tripping in its homeland is attributed to its shifting focus on the global markets, be it in terms of marketing, sales or R&D. Brand Analyst Jagdeep Kapoor told 4Ps B&M, “Haier has been losing share in Chinese market because it lost focus in the local market and took the brand for granted… this is the biggest mistake they made.” As global giants are covering previous ground on Haier’s home turf, it’s time to return...

(End of Pallavi Srivastava column)

Lee’s nature call...
Wal-Mart goes green, but is it enough to undo the damage to its image?

(column by Angshuman Paul)

Guess whose Lee Scott’s latest pal? Well, it’s our very own Sun. Yes, this man who heads world’s largest retail organization – known as Wal-Mart, is now on a spree to inject solar and other energy sources in the veins of Bentonville Beast.

As per a new initiative, Wal-Mart is planning to install solar rooftop panels at 22 facilities in California and Hawaii to mint an exorbitant 20 megawatts of electricity. The project is expected to save pennies on electric bills, as solar power is much cheaper than traditional sources. Lee also expects to reap the benefits that are doled out by the government subsidies.

That’s not all – Lee has some more smart environment-friendly initiatives up his sleeves. Earlier in this year, he announced, “Global Innovation Projects”, trying to put a stop to non-renewable energy usage. Lee affirms, “If we worked with our suppliers to take non-renewable energy off our shelves and out of the lives of our customers, we could create metrics and share best practices, so our suppliers could make products that rely less on carbon-based energy.” There are talks of developing an energy efficient bulb capable of reducing CO2 emissions by 2008 as well.

Lee’s suddenly developed penchant for energy is actually part of a million-dollar game plan of giving an environmentalist touch to Wal- Mart. So Lee’s pledge to save natural sources of energy, like 324,000 tonnes of coal and 67 million gallons of diesel fuel per year, is definitely not a nature call. Great initiative no doubt, but is it adequate to move off the allegations against Wal-Mart for exploiting society through environment pollution and paying less to its employees? Noted American environmentalist, Bill McKibben alleges, “I just can’t think of a community in the US that has been improved by Wal-Mart.” It’s not surprising that denizens of Wal- Mart’s home soil, coin the company as the one that has made money by paying less and exploiting more.

Despite such disrepute, Lee is in a sunny spirit with his ventures. But Lee must ensure that Wal-Mart remains spot on with its green initiatives. Being a giant, Wal-Mart is constantly under scrutiny, and it has also faced penalties for its environment related projects in the past, so it has to be careful. If you are not good, it would be very difficult to look good Mr. Lee!

(End of Angshuman Paul column)

‘Absolut’ rubbish!
Absolut Vodka goes for a total change

(column by Preeti Chaturvedi)

When makers of the once dominant Absolut Vodka had to reposition the brand, they ran a campaign titled “In an Absolut World.” It depicted an ideal world where everything is as perfect as Absolut Vodka. However, today the brand is hardly the “ideal” it claims to be. “We are still a very strong brand in the US. But we do understand that the vodka category has changed and we are working towards reestablishing and reworking Absolut’s position in the category,” states Tim Murphy, Senior Brand Director, Absolut Spirits Company. Absolut is now allocating 20-30% of its advertising spend on mediums like TV, outdoor and digital to succeed.

The vodka was never positioned as vodka but as a fashion statement. The brand has also lost share to a lot of new players. According to trade magazine, Impact, growth rate of Absolut from 2000 to 2005 has been 4.9%, lower than other majors. Time for ‘absolut’ change, right? 4Ps

(End of Preeti Chaturvedi column)

Get ‘virtual’ly savvy!
Internet advertising is big business

(column by Rohan Sachdev)

According to an Interactive Advertising Bureau official, revenue of US online advertising grew by 35% in 2006, over 2005. $17 billion worth of advertising was generated through US websites in 2006, the report said. The primary contributors were search engine and display advertising, generating 40% & 32% respectively, of revenue. The 10 largest ad-selling companies captured 69% of total revenue, but there’s scope for all. However, there is still room for improvement. For the amount of time people spend online, companies spend less than they should on online advertising – only 6% of overall ads spend. In contrast, marketers spent almost $58 billion in direct mail advertising and about $51.2 billion in newspaper ads in 2006. Surely not the way things should be.

(End of Rohan Sachdev column)

They value life on Mars!

(column by Karan Mehrishi)

Mars UK has finally conceded to vegetarian demands. The company which decided to use animal derived ‘whey’ in its chocolates, finally decided against its decision. Close to 6,000 complaints and disapproval by 40 MPs brought about this change in policy. Mars UK, which manufactures popular chocolates such as Mars, Snickers, Galaxy and Twix, had recently announced that its products will no longer be consumable by strict vegetarians as the company will use animal enzyme rennet supplement instead of traditionally used vegetarian sources. UK’s estimated three million vegetarian population was aghast by this new procedure and expressed extreme dissatisfaction for the same. With the entire brand name at stake, the MD of Mars UK, Fiona Dawson did a volte face within a week! After severe criticism, the company will return to its old ways of making ‘whey’. According to market reports, Mars UK will immediately get back to its original recipe for relatively popular brands such as Mars and Snickers. Mars UK owner Masterfoods has approached Vegetarian Society for accreditation. Chief Executive, Vegetarian Society, Dr. Annette Pinner, said, “...We are very pleased that they now recognize the importance of integrity to all their customers, especially the vegetarians.”

(End of Karan Mehrishi column)