Showing posts with label competitive-appeal. Show all posts
Showing posts with label competitive-appeal. Show all posts

Monday, 23 April 2012

Nestlé Wins Battle For Pfizer Unit With $11.9bn Deal

Pfizer has agreed to sell its baby food unit to Nestlé, in a deal worth $11.9bn, giving the Swiss food giant a major boost in emerging markets across the world.

With 85% of Pfizer’s sales in emerging markets – the deal will complement Nestle’s existing infant nutrition business perfectly. The sale marks Pfizer’s largest divestiture since it divested some consumer health brands to J&J in 2006 for $16.6bn. The unit owns infant formulas such as SMA and Promil, and also makes Enercal supplements for adults. It has a network in more than 60 countries, and was the world’s fifth-largest maker of infant formulas in 2010.

  • As the No.1 food company in many countries, Nestlé are accustomed to, and will have anticipated issues raised by anti-trust/monopoly legislation.
  • This step to full global coverage will enable the company to develop and sustain a fully global strategy for the combined brands in baby food.
  • However, given that the company will probably take its time integrating the two operations in order to secure a smooth transition for the companies and the trade (the 1988  Nestlé–Rowntree integration took several years), this may give competitor brands some time to adjust to the new category dynamics…although a couple of what-ifs this morning might be a wise precaution...

Friday, 13 April 2012

Flash Mobs morphing into Cash Mobs, a new force in retailing?

Inspired by Flash Mobs, a cash mob is a group of people who assemble at a local business and all buy items from that business. These groups of online activists are harnessing social media like Twitter and Facebook to get consumers to spend at locally owned stores in cities around the world in so-called Cash Mobs.
At the first International Cash Mob day on Saturday 24th March, wallet- toting activists gathered in as many as 200 mobs in the United States and Europe, with the aim of spending at least £12 each in locally owned businesses, according to the concept's founder, Cleveland lawyer Andrew Samtoy. 
Essentially, this is a break-through moment, an event where a virtual society enters the real world, prepared to put their real money where their virtual/real mouths are, and actively support local shops….as their contribution to the on-going health of the community.
The need for conversion
However, it is essential to bear in mind that such initiatives are one-off injections of support, the ‘first bite’ of a new product. As you know, the ‘repeat purchase’ depends upon how well the experience matches, or exceeds expectation. In other words, for local retailers this is a windfall, an opportunity to meet and influence a target audience that wants to support local business and the community, and is prepared to spend money in the process…and tell others about their experiences (Remember, that’s how they got to the shop in the first place)
Capitalising on the trial visit
To convert these ‘trialists’ into regular customers, retailers need to ensure that their 8P Marketing Mix (Products & Assortment, Pricing, Promotional activities, Place i.e. store location, Personnel, Physical distribution & handling, Presentation of stores & products, and Productivity) more closely matches shopper need than equivalent offerings available from local and out-of-town multiple retailers. What they lack in price advantage, needs to compensated for in terms of personal service and convenience, to an extent that shoppers willingly come back for more…
How suppliers can help
Suppliers can help by revising their independent retail business model, and find ways of helping survival-mode retailers to adapt the state-of-art retailing principles established by the major multiples, and build an alternative route to consumers, as a way of realistically diluting trade concentration.
Have a pro-active weekend, from the NamNews Team!.

Tuesday, 27 March 2012

Same-price pack-size shrinkage, a con or what?

Given the status of the brands and companies involved, it is obvious that the letter of the law is being adhered to, in that weights and measures are all accurately displayed on the pack. It is not even about the spirit of the law, in that it not the job of the legislature to maintain consumer trust in a brand. It is not about economics in that most research will prove that prices of ingredients, energy and labour have consistently risen faster than improvements in NAMs' ability to negotiate trade price increases of equivalent value…

'Everyone doing it'?
Moreover, it is not about the fact that 'everyone is doing it', in that the degree of collusion required to accurately preserve market/category equilibrium would be in clear breach of the law.
It is not even a new phenomenon, given that many of us cherish memories of our first bar of Cadbury’s Milk Flake, when it seemed so large one did not even object to sharing it with a younger brother..

Perception is the problem
No, pack size shrinkage is really about perception, the fact that a brand that has worked so hard and so long on convincing me that their combination of Product, Price, Presentation and Place is better than the competition in terms of value for money, suddenly, without consultation, destabilises that trust by allowing me to conclude that I am no longer getting what I thought it said on the tin… Moreover, if the brand’s marketing mix previously offered only a marginal advantage over the competitor’s offering, then the competitor suddenly becomes a serious contender for my attentions and even loyalty, at least until the next price rise.....

We are all savvy consumers

It is especially an insult to my intelligence as a savvy consumer, a person who has survived by learning never again to outsource product and service decision-making to marketers and retailers, and has set demonstrable value-for-money as a prerequisite for any purchasing decision.

What to do about it?
In fact, all the clues are available in the notes above:
If a brand makes a fundamental change in the Marketing Mix, it destabilises the market/category’s status quo, and needs to ‘re-sell’ me on its advantages over available alternatives, (via an up-to-date Buying Mix Analysis). 
I am not interested in boring stuff about ingredient, energy and labour cost increases, the media are full of it, in between the bits about political and financial corruption. 
I don’t want to know about those nasty retailers unfairly refusing to allow adequate and logical price increases.
I simply want assurance (and increasingly, proof) that the brand’s combination of Product, Price, Presentation and Place is so overwhelming that I would not even dream of considering alternatives…
Seemple, uh?       (Seemple = Shorthand for 'seems simple' ; Uh? = please read again )

Thursday, 15 March 2012

Where now for Tesco succession?

Too early to check the hats in the ring, we believe the City will give Clarke a year, following the Brasher development.

Decision time
-  A fast, high-level internal switch would allow Clarke to maintain global momentum. 
-  Going outside for what would need to be a strong, experienced and ‘natural-for-the job’ player would take too long, might simply re-ignite possible internal career-pressures, and could suggest a possible Clarke-replacement option for the City….. 

Marketplace reaction
Meanwhile, competition in the marketplace will be a combination of Tesco defence, with other multiples attempting various degrees of land-grabbing, all now led by very experienced teams focused on optimising this new window at Tesco’s expense.

Supplier action
Suppliers now need to revisit their trade strategies to reflect new competitive appeals in an unprecedented market, and factor in probable moves of the mults. Retailers will not waste time being subtle, so the moves should be pretty obvious.

Then working from 'their' consumer back to the essence of the brand, suppliers should simplify and make the offering very transparent, and echo this in simplified trade strategies, with built-in fair share and compliance conditions, all the way through the supply-chain...

Or sit on the sidelines, have a better view of the race 
and wait for things to settle down...
Either way, it is going to be tough, very tough for all stakeholders…

Wednesday, 7 March 2012

Unilever And GSK use of NFC: key potential pay-offs for enabled-stakeholders

Starting with 325 six-sheet digital poster sites in Reading, the key potential lies in the simplicity and scalability of NFC.
With over 130,000 poster sites in the UK, each offering an incremental route-to-consumer as each poster site becomes a new retail outlet, with advertisers gaining access to additional consumers data (name of NFC-enabled users, location, and shopping history) at ‘point-of-purchase’.
Advertising gains  
For advertisers, the combination of the low ‘chipping-cost’ of each poster with the ability to offer instant gratification gives a whole new meaning to impulse purchasing.
Moreover, the user-feedback data can be used to build ‘super-local’ highly accountable promotional campaigns using media-rich, high quality content that can only serve to drive store-level assortment for those retailers (and their suppliers) that want to stay in the game.
(For those unwilling to wait, yet needing some relative response details, some recent US data on the combined use of Bluetooth, WiFi, QR Codes and NFC to promote hotel room booking may help).
All told, it would appear that this new potential will only be limited by the availability of NFC-enabled phones and a possible privacy backlash if not handled carefully..
Raising the competition bar
For traditional retailers and brand owners providing only a token response to the savvy consumer’s need for individual attention via localised offerings, there is a real danger that their NFC early-adopter competitors may take NFC as the new ‘normal’, while traditional players insist on using up those bulk-buy mountains of  old posters and leaflets that seemed such a bargain only yesterday…

Monday, 5 March 2012

A Scandinavian Scotland – simply an export-opp for other major mults?

                                                                                                               map: The Copenhagen Post
To be or not to be Scandinavian, that might be the question soon enough for Scotland, if it decides to become independent. In which case, JS, Asda, Morrisons and the Co-op would join Tesco in having to factor in a balance of UK and overseas presence into their business strategies.

What they have in common
Scotland and its northern neighbours have geographic proximity, shared access to the same body of water, and the resultant multitude of historical links between Scotland on the one side, and Iceland, Norway and Denmark on the other. (More on social,political & religious similarities)

Advantages for Scotland

One final, crucial advantage of a Scandinavian over a British Scotland: it would no longer be in the Far North of the UK, but in the Southwest of the Scandinavia. The place would not have to move an inch, not even a centimetre, but it would sound less cold, dark and at the end of everything. Scotland’s new orientation could finally allow it to ditch some of the negative stereotypes that have been dogging it for far too long. It would no longer be colder, emptier and darker than England.
Key learnings for UK mults
Indeed, this new perspective might then begin to influence the multiples’ approach to the UK consumer-shopper. Think of all the ethnic food and non-food enjoying a new appeal down south… The multiples’ management would surely benefit from a foreign tour of duty, with no disruption of the family, competing with Tesco from a totally new geographical perspective. Management would no longer have to fight for recognition of local need in UK policy, and store-based assortment would surely become a natural output of the new thinking…
Supplier benefits
Meanwhile, UK NAMs, apart from adding ‘foreign’ experience to their CVs, would surely benefit from having to conduct periodic store visits to deal with their newly vocal ‘scandinavian’ customers, until eventually their companies see the wisdom of appointing a dedicated team to operate at local level…

Friday, 2 March 2012

Sofa King Silly?

After nine years and one police investigation cheeky Northampton retailer The Sofa King has been told by the advertising watchdog that it must ditch its catchphrase "Where the Prices are Sofa King Low!"
In banning the advert, the ASA have fallen foul of the Law of Unintended Consequences, in that the Internet is now awash with references to the initiative (Google Sofa King and see the 24m results for yourself) In fact I hope that Northampton traffic authorities are ‘Sofa King well prepared’ that this weekend’s inevitable shopper invasion will not pose a problem…
This all puts me in mind of schooldays in Ireland when ‘rude’ books were guaranteed massive sales boosts as soon as they were banned by the authorities…
In fact, Ronnie Drew of The Dubliners folk group used to say that instead of making the Irish language compulsory in schools, the government should ban it, thus ensuring its enthusiastic application 24/7…
Have a couch-bound weekend, from the Namnews Team!

Friday, 26 March 2010

Penalties for over-stocking?

Not an application of GSCOP excess-ordering penalties, but a Dutch cannabis shop-owner has been fined 10 million euros for breaking Netherlands drug laws. The Checkpoint coffee shop in Terneuzen which used to serve up to 3,000 customers a day, has been selling ten kilograms of marijuana and hashish per day, vs maximum permitted trading stocks of 500 grams of cannabis at any particular time.

A disappointment for those KAMs wishing to include the coffee-shop in their routine store-check trips (in case of memory-lapse, Terneuzen is close to the Belgian border) well worth the trip for many…

Have a forgetable weekend from the Namnews Team!

Monday, 23 November 2009

An Offer You Cannot Refuse?

Picture: Pacemaker

Cross-border shopping in Northern Ireland can not only offer €/£ parity, but also cheaper prices on goods that are 18-20% dearer in the South, according to the Irish Times.(See article for more extreme examples)

Whilst Irish politicians' pleas to shoppers not to travel North are obviously falling on deaf ears, the real issue for retailers and suppliers is the growing demand for UK multiples and suppliers to reveal the profitability of their Irish operations in their annual reports.

Otherwise their claims that the price discrepancies are simply due to the higher costs of doing business in the Republic will be increasingly undermined.

Ultimately, a government under unprecedented domestic pressures could attempt to force disclosure via the tax route…..

Thursday, 23 April 2009

Budget action for NAMs & KAMs

Yesterday's budget side-stepped the real issues, the need to radically cut public spending and public sector employment…
Whilst the electorate will eventually take appropriate steps via the polls, NAMs & KAMs need to focus day-job activities on the here & now.

In other words really go back to basics.
Whilst the cliches abound, i.e. cut every cost (we have to assume everything possible has been cut), it is preferable to focus on making every £1 count…this means that if yours is a 10% net profit company, then every £10k spent on the customer needs incremental sales of £100k to justify the expense.
More importantly, it is crucial that your marketing colleagues re-assess your brand's pulling power with the consumer vs other brands and own label alternatives (try our Buying Mix Analysis tool for speed and consistency) and cut out the resulting 'me-toos' and passengers in the product portfolio.
Then apply the same technique to your customer portfolio to re-assess your appeal to each customer, using their latest financials..and form new trade partnerships.

These are radical moves, but yesterday the Chancellor proved that the problems are even more so.
Opportunities abound while others try to recover from shell-shock!!

Wednesday, 22 April 2009

Need to out-Tesco Tesco?

Tesco latest results indicate that apart from some local share slippage, their profit performance (Op profit margin of 6.2% in the one of the worst recessions in recorded history) indicate that they continue to provide a template for retail everywhere.

Essentially, they are simply good shopkeepers, doing simple things very well, while others are maintaining like-for-likes at a cost to the bottom line.

The options for suppliers include investing for growth with Tesco, and encouraging initiatives by other retailers that apply 'Tesco' principles such as meeting consumer-shopper fact-based need, space & supplychain optimisation, strong trade partnerships and effective use of money. (see how) for Namnews subscribers.

Sure, this will make Tesco an even greater, more powerful part of of your customer portfolio, and tougher to deal with, but the resulting skills are transferable, if you agree that the 'Tesco-template' is right for you. It also makes it easier to recognise the same qualities in other customers.
Find out how on our new webinars (H&B) & (Grocery+Nonfood )

Alternatively, why not short-change Tesco and invest the savings in 'weaker' customers, and see where that leaves you….

Good video analysis of Tesco results on Financial Times

See Sky 3.5 min interview with Terry Leahy including suppliers, Value &
Discount ranges etc. on YouTube

Monday, 20 April 2009

Arrival of another Nokia moment?

Nokia, a manufacturer of rubber wellington boots, looked for a category that was such an early stage of development that every supplier was a beginner and began to make mobile phones i.e. Long established telecoms suppliers had no real advantage over new entrants.

It seems to me that we have now arrived at another 'Nokia moment' - a time when everything is changed, changed utterly, a time when the rules of the business game have so changed that all suppliers are at square one, demand is new, money has a new value, the consumer is more discerning, competitive set is different......

Opportunities abound for suppliers who treat this as a new market, re-identify consumer need, re-assess offering vs. available competition, re-evaluate routes to consumer, and especially trade partnerships i.e. time to re-evaluate product portfolio, customer portfolio and market match both brands and customers vs. latest consumer need.....

Tuesday, 24 March 2009

Retail - All change?

Given the differing levels and types of impact of the credit crunch upon different consumer segments (mortages, pensions, savings, stocks, employment) causing a radical re-balancing of consumer spending-profiles in the past six months, is it not reasonable to anticipate fundamental changes in the financial circumstances of your major customers?
With their different financial profiles in terms of market capitalisation, ROCE, share-price, levels of overdraft and stockholding, credit period, margins, terms and ownership vs leasing of premises, it follows that each customer has been affected in radically different ways by the shortage of money in the economy.

This means that their relative risks and value within your customer portfolio have changed, fundamentally.
Time for a reclassification of each in terms of invest, maintain or divest, followed by a re-audit of your pulling power relative to your competition in the eyes of each customer?
Or perhaps run the risk of waiting until it all settles down?